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China’s parliament to delay Hong Kong legislative vote, overhaul electoral system

HONG KONG — Elections for Hong Kong’s legislature will likely be deferred for a second year to September 2022 as Beijing plans a major overhaul of the city’s electoral system, a severe blow to remaining hopes of democracy in the global financial hub.

The delay, which the South China Morning Post and other local media reported on Friday, citing unnamed sources, would be in line with a new effort by Beijing to ensure “patriots” are in charge of all public institutions in the former British colony.

The National People’s Congress, China’s rubber-stamp parliament, will pass the changes at its annual session which opened on Friday and will last a week.

Senior Chinese lawmaker Wang Chen said China will change the size, composition, and formation method of an electoral committee that chooses Hong Kong’s leader and give it powers to pick many of the city’s legislators as well.

The changes follow mass anti-government protests in 2019 and a subsequent crackdown that has left most high-profile pro-democracy politicians and activists either in jail or in exile, along with the imposition of a sweeping national security law.

Still, Beijing is keen to eliminate any possibility of the opposition affecting the outcome of elections in Hong Kong, whose return to Chinese rule came with a promise of a high degree of autonomy.

Hong Kong Secretary for Mainland and Constitutional Affairs Erick Tsang has defined patriotism as “holistic love” for China, including the leadership of the Chinese Communist Party.

Riding high on the back of the 2019 protests, the democratic camp had some slim hopes of winning an unprecedented legislative majority in 2020 elections, which the government postponed, citing the coronavirus.

But with some political parties disbanding and pro-democracy politicians in jail, it is unclear what shape any future opposition will take in Hong Kong and how its message could fit with the patriotic loyalty demanded by the Communist Party.

Beijing had promised universal suffrage as an ultimate goal for Hong Kong in its mini-constitution, the Basic Law.

“This is more than going backwards, it’s getting close to the opposite extreme, moving further away from universal suffrage,” said Ivan Choy, senior lecturer at Chinese University of Hong Kong’s department of government and public administration, referring to the planned changes.

TAKING CONTROL

Local media said the electoral overhaul would include increasing the size of the electoral committee from 1,200 to 1,500, and the city’s legislature from 70 to 90 seats.

Currently half of the 70 seats in the Legislative Council, known as LegCo are directly elected, a proportion which will shrink with the extra seats picked by the electoral committee. The other half represents industries, unions, and professions and is largely stacked with pro-Beijing figures.

The representation of community-level district council officials in both the election committee and LegCo is likely to be scrapped, media said.

District councils are the city’s only fully democratic institution, and almost 90% of the 452 district seats are controlled by the democratic camp after it humiliated the establishment in a 2019 vote. They mostly deal with mundane issues such as bus stops and garbage collection.

Overall, the moves will reduce democratic representation in both LegCo and the election committee, which must convene before Chief Executive Carrie Lam’s five-year term ends in July 2022.

A broader use of patriotic pledges is also expected to enforce loyalty. Such oaths have already been used to disqualify some democratic politicians from LegCo and are likely to be used to oust many of the district councillors.

While critics see the new security law as a tool to crush dissent and curb freedoms, authorities say it was vital to end the 2019 violence and fend off manipulating “foreign forces.”

In a statement on Friday, Hong Kong leader Ms. Lam backed the planned changes, saying “it is a natural requirement that Hong Kong must be governed by patriots” and that the changes will “restore law and order.” —  Clare Jim and Marius Zaharia/Reuters

Australia asks European Commission to review Italy’s vaccine block

CANBERRA — Australia has asked the European Commission to review a decision by Italy to block a shipment of AstraZeneca’s coronavirus disease 2019 (COVID-19) vaccine, while stressing on Friday the missing doses would not affect the rollout of Australia’s inoculation program.

Italy, supported by the European Commission, barred the planned export of around 250,000 doses of AstraZeneca’s vaccine after the drug manufacturer failed to meet its European Union contract commitments.

“Australia has raised the issue with the European Commission through multiple channels, and in particular we have asked the European Commission to review this decision,” Australian Health Minister Greg Hunt told reporters in Melbourne.

Mr. Hunt said Australia had already received 300,000 doses of AstraZeneca’s COVID-19 vaccine, which would last until local production of the vaccine ramps up.

Australia began its inoculation program two weeks ago, vaccinating frontline health staff and senior citizens with Pfizer’s COVID-19 vaccine though doses of that vaccine are limited amid tight global supplies.

AstraZeneca did not immediately reply to a request for comment. AstraZeneca did not immediately reply to a request for comment.

While seeking the European Commission’s intervention, Australia’s Prime Minister Scott Morrison said he could understand reasons for Italy’s objection.

“In Italy, people are dying at the rate of 300 a day. And so I can certainly understand the high level of anxiety that would exist in Italy and in many countries across Europe,” Mr. Morrison told reporters in Sydney.

Italy’s move came just days after Prime Minister Mario Draghi, who took office last month, told fellow EU leaders that the bloc needed to speed up vaccinations and crack down on pharma companies that failed to deliver on promised supplies.

EU countries started inoculations at the end of December, but are moving at a far slower pace than many other nations, with officials blaming the slow progress in part on supply problems with key manufacturers.

Australian officials on Friday administered the first dose of the AstraZeneca vaccine, to a doctor.

Australia has ordered 53.8 million doses of the AstraZeneca vaccine, which was developed in conjunction with the University of Oxford. Local pharmaceutical company CSL Ltd has secured the rights to manufacture 50 million of those doses in Australia and expects to release the first batch near the end of March.

The locally produced doses will provide the backbone of Australia’s inoculation programme, which officials hope to complete by October.

Australia is under less pressure than many other countries, having recorded just under 29,000 COVID-19 cases and 909 deaths. The lower infection and death tallies have been helped by strict lockdowns, speedy tracking systems and border closures. — Colin Packham/Reuters

Amid shortage, US suppliers to Chinese chip giant SMIC struggle to get export licenses

The US government has been slow to approve licenses for American companies like Lam Research Corp and Applied Materials Inc. to sell chipmaking equipment to China semiconductor giant SMIC, sources said, as the impact of a global chip shortage spreads.

Many licenses for US suppliers to ship an estimated $5 billion dollars’ worth of equipment and materials have not come through, according to more than half a dozen industry sources, though numerous companies submitted applications soon after the Chinese company was blacklisted in December. Certain licenses have been granted, including for small numbers of expensive equipment in recent days.

As policy shifts under President Joseph R. Biden, Jr., who took over from Donald J. Trump in January, US government agencies led by new appointees still have not completely decided what should be sold to Semiconductor Manufacturing International Corp. (SMIC), which produces chips for Qualcomm Inc. and other American companies.

The Trump administration placed SMIC on the US Department of Commerce’s entity list over concerns of SMIC aiding China’s military.

The listing, which requires US suppliers to obtain a license before shipping goods to SMIC, is unusual because it says most products should be granted on a case-by-case basis. However, equipment that can be used to make only the most advanced, 10-nanometer and smaller chips is likely to be denied licenses.

The administration is supposed to make decisions on license applications within a month, but follow-up questions stop the clock.

“Lam Research is still in the application process and has not yet received a response,” a Fremont, California, company spokeswoman said on Wednesday.

Applied Materials’ chief financial officer said in a Feb. 18 earnings call its forecast did not assume licenses would come through. A spokesman for the Santa Clara, California-based company declined further comment on the licenses this week.

SMIC did not respond to requests for comment, but the company has said it provides services solely for civilian and commercial end-users and that it has no ties to the Chinese military.

Decisions on licenses have been held up as officials ask follow-up questions about applications in part to determine whether the parts or components could be diverted for use in producing items 10 nm or smaller, sources said.

Washington trade lawyer Giovanna Cinelli said many license applications have resulted in “a lot of back and forth, which has elongated the period of review.”

In a statement, a Commerce Department official dismissed the possibility that curbs on SMIC could contribute to the chip shortage, noting that the shortfall was tied to older technologies while SMIC restrictions relate to leading-edge technology. The statement did not address the potential impact of delays in licenses for older technology.

SMIC, the largest foundry in mainland China, is an important player in the global semiconductor supply chain, which is under pressure as pandemic lockdowns drive up demand for electronics such as laptops and phones. Last month, it said it could not meet customer demands for certain technologies and its plants have been running “fully loaded” for several quarters.

SMIC’s technological capabilities lag far behind cutting-edge foundries like industry leader Taiwan Semiconductor Manufacturing Co., according to industry sources.

Companies like Applied Materials and Lam Research, two key suppliers of production equipment, submitted numerous license applications to sell to the company. The bulk have not yet been acted on, industry sources said.

A spokeswoman for Entegris Inc., an advanced materials supplier, said the Massachusetts-based company had submitted 10 applications to sell to SMIC and received its first license in the past week.

Other companies that ship to SMIC include California’s KLA Corp and Massachusetts-based Axcelis Technologies Inc. A KLA spokeswoman declined to comment on any licenses and, while Axcelis’ CEO spoke of “uncertainty” related to its licenses on Feb. 11, a company spokeswoman declined to provide an update.

Cymer, a San Diego company that makes deep ultraviolet light sources, is also among suppliers that need licenses to send parts to SMIC. A spokeswoman for ASML, the Dutch chip equipment maker that owns Cymer, declined to comment on the licenses, saying she could not discuss customer-specific information.

Qualcomm, which uses the Chinese foundry to produce chips with decades-old technology, put in applications for tools SMIC needs to produce the chips, just in case equipment makers do not get their licenses for the tools, an industry source said. But they have not come through yet, the source added.

In September, SEMI, a worldwide industry group, said in a draft letter seen by Reuters that SMIC accounts for as much as $5 billion in annual U.S. sales. — Karen Freifeld and Alexandra Alper/Reuters

Standhardinger for Slaughter in big man deal

The Northport Batang Pier and Barangay Ginebra San Miguel Kings swapped big men in a Philippine Basketball Association deal announced on Friday.

A trade long talked about, the one-to-one exchange had Christian Standhardinger going from the Batang Pier to the Kings for Greg Slaughter. The swap was approved by the league the previous day.

Mr. Standhardinger, 31, joins a Barangay Ginebra team fresh from its conquest of the Philippine Cup in the lone PBA tournament in 2020.

The 2017 top overall rookie pick is expected to provide flexibility in the frontcourt of the Kings with his ability to play multiple positions as well as adding firepower.

In the PBA “bubble” tournament last year, 6’8” Standhardinger tallied double-double averages of 19.9 points and 12 rebounds for the Batang Pier. He peppered it with 3.8 assists and 1.3 steals in 10 games.

His transfer to Barangay Ginebra marks a return for him to the San Miguel group where he began his PBA career after being drafted by the Beermen four years ago.

Mr. Standhardinger was shipped by San Miguel to Northport midseason in 2019.

In trading Mr. Standhardinger, the Batang Pier cited “contract issue” as a reason.

With the Filipino-German player not signing up yet with the team, they felt they needed to move and look elsewhere.

Meanwhile, seven-footer Slaughter, 32, will try to start fresh with Northport after seeing his six-year relationship with the Kings come to an end.

He took a sabbatical from basketball last year but it came amid reports of plans of the team trading him away.

Mr. Slaughter recently joined the Kings after going to the United States to work on his game.

While with Barangay Ginebra he averaged 13.8 points, 8.9 rebounds, 1.5 assists and 1.2 blocks and helped the team win four league titles.

“[It’s] a good trade, beneficial to both teams. The team is thrilled to have him (Slaughter) in the team knowing he worked hard in the US to polish his game,” Northport said in a statement.

Smart leads with best speed and mobile video experience in PH

Leading mobile services provider Smart Communications, Inc. continues to give subscribers the best mobile experience as it dominates the latest Mobile Network Experience Report by independent mobile analytics firm Opensignal.

Smart, which has been ramping up its network improvements across the country, continues to lead in terms of giving Filipinos the best Video Experience, Download Experience, Upload Experience, 4G Availability, and 4G Coverage Experience.

Smart customers analyzed by Opensignal “consistently had the fastest mobile Video Experience in the Philippines,” notes the November 2020 Mobile Network Experience Report* released by the firm.

“Ever since we first analyzed Video Experience in a Philippines Mobile Network Experience Report — back in March 2019 — Smart has won every Video Experience award alongside our Download Speed Experience and Upload Speed Experience awards,” it adds.

In the best position to serve Filipinos

“These independent findings validate the significant progress we’re making in our accelerated network expansion with one clear goal – to make it simpler for Filipinos to access cutting-edge digital technologies and life-changing digital services,” says Jane J. Basas, SVP and Head of Consumer Wireless Business at Smart.

“Backed by no less than the country’s most extensive network infrastructure in the Philippines, Smart is in the best position to support the digital needs of Filipinos to access information, level up their livelihood, enjoy entertainment, and connect with their loved ones on the go,” she adds.

As of December 2020, PLDT’s fiber infrastructure, the most extensive in the country, comprised more than 429,000 kilometers. This fiber infrastructure supports Smart’s mobile networks, which now cover 96% of the population.

To date, Smart has increased the number of its base stations across the country to over 59,000 sites, an increase of 20% compared to end-2019. Smart also plans to expand its LTE network by adding about 4,000 more base stations this year.

The leader in 5G

To make the country’s fastest mobile data network even faster, Smart has also fired up more than 1,400 5G sites as part of its ongoing nationwide 5G rollout, by far the most extensive in the country.  Smart is also planning to grow its 5G base stations by over 3,800 this year.

Smart is at the forefront of the 5G revolution as the first Philippine telco to launch 5G services nationwide last July in key areas in Metro Manila, Cebu, Davao, Boracay, Iloilo, Rizal, Laguna, Cavite, and New Clark City in Pampanga.

Smart is also the first Philippine telco to launch Signature 5G Plans, which are specially designed with generous data allocations so customers can make the most of the ultrafast Smart 5G services.

To meet the growing digital needs of Filipinos, Smart and its parent company PLDT are prepared to invest between Php 88 billion and Php 92 billion in capital expenditures in 2021.

China says it will deter Taiwan independence but seek peaceful ties

BEIJING — China will resolutely deter any separatist activity seeking Taiwan’s independence but is committed to promoting the peaceful growth of relations across the Taiwan Strait and China’s “reunification”, Premier Li Keqiang said on Friday.

China, which claims democratic Taiwan as its own territory, has increased its military activity near the island in recent months, responding to what it calls “collusion” between Taipei and Washington, Taiwan’s main international backer and arms supplier.

Speaking at the opening of the annual meeting of China’s parliament, Mr. Li said Beijing stands by the “one China” principle, which states that Taiwan is part of China.

China remains committed “to promoting the peaceful growth of relations across the Taiwan Strait and China’s reunification,” he told the roughly 3,000 delegates at Beijing’s Great Hall of the People.

“We will remain highly vigilant against and resolutely deter any separatist activity seeking Taiwan independence,” Mr. Li added.

“We will promote exchanges, cooperation and integrated development across the Taiwan Strait. Together we can shape a bright future of rejuvenation for our great nation.”

Most Taiwanese people have shown no interest in being ruled by autocratic China, and have also strongly supported anti-government protests in Chinese-run Hong Kong.

Taiwan President Tsai Ing-wen was re-elected by a landslide last year on a promise of defending the island’s democracy and standing up to China.

China believes Ms. Tsai wishes to push for Taiwan’s formal independence, a red line for the Chinese government which has never renounced the use of force to bring the island under Beijing’s control.

Ms. Tsai says Taiwan is already an independent country called the Republic of China, its formal name. — Reuters

New Zealanders take to the hills as powerful quakes trigger tsunami waves

WELLINGTON — Small tsunami waves triggered by a series of powerful earthquakes hit the east coast of New Zealand’s North Island on Friday and authorities said thousands of residents who had evacuated to higher ground could now return to their homes.

Officials had warned that waves could reach three meters (10 feet) above high tide levels after the quakes—the strongest a magnitude 8.1—but the largest waves have now passed, the National Emergency Management Agency (NEMA) said as it downgraded the threat level.

“All people who evacuated can now return,” the agency said.

Video footage posted on social media showed surges of water entering a marina in Northland and on the North Island’s East Cape region.

Earlier on Friday, workers, students, and residents in areas like Northland and Bay of Plenty, on the northern coast near Auckland, were put on alert after the three offshore earthquakes in less than eight hours triggered tsunami sirens and warnings.

An emergency alert was issued for all coastal areas around Auckland, a city of 1.7 million, where people were told to stay away from the water’s edge. There were no reports of damage or casualties from the quakes.

The third and strongest quake struck the Kermadec Islands, northeast of New Zealand’s North Island, on Friday morning, coming shortly after a 7.4 magnitude earthquake in the same region. Earlier, a large 7.2 magnitude earthquake struck about 900 km (540 miles) away on the east of the North Island.

Linda Tatare, a resident of Anaura Bay, on the North Island’s east coast, said the small community of about 50 left for higher ground in the morning.

“Everyone, and their dogs, are up in the hills,” Tatare told Reuters. “We are safe. We can all see our properties from here.”

Tsunami warnings were also put out for Pacific islands including New Caledonia and Vanuatu, while smaller tsunami waves may be recorded as far away as Antarctica and parts of South America, the U.S. Pacific Tsunami Warning Center said.

Scientists said Friday’s series of quakes was caused by tectonic movement on the boundary of the Australian and Pacific plates, part of the so-called Pacific Ring of Fire that New Zealand sits on.

A decade ago, a magnitude 6.3 quake killed 185 people in the South Island city of Christchurch.

Australia issued a marine tsunami threat for Norfolk Island, a tiny Australian territory with about 1,750 residents, but said there was no threat to the mainland.

Norfolk Island residents in areas threatened by land inundation or flooding were advised to go to higher ground or inland, the Bureau of Meteorology said, as small tsunami waves impacted the coastline. — Praveen Menon/Reuters

Feb. inflation fastest in 26 months

The overall year-on-year increase in prices of widely used goods picked up for the fifth straight month in February by its fastest pace in 26 months, the government reported this morning.

Preliminary data from the Philippine Statistics Authority (PSA) showed headline inflation at 4.7% last month, picking up from 4.2% in January 2021 and 2.6% in February 2020.

The February inflation result marked the fastest pace in 26 months or since the 5.1% in December 2018.

The latest headline figure is lower than the 4.8% median in a BusinessWorld poll conducted late last week but falls within the 4.3%-5.1% estimate given by the Bangko Sentral ng Pilipinas (BSP) for February.

Year to date, inflation settled at 4.5%, beyond the BSP’s 2-4% target for the year.

Core inflation, which discounted volatile prices of food and fuel, stood at 3.5% in February, picking up from 3.4% the previous year and 3.2% a year earlier. It averaged 3.5% so far this year.

“The uptrend in the country’s inflation was mainly brought about by the uptick in the inflation of the heavily-weighted food and non-alcoholic beverages at 6.7% during the month, from 6.1% in January 2021,” the PSA said in a statement.

The food alone index accelerated to seven percent in February from 6.6% the previous month and 2.1% a year ago.

Similarly, the February inflation rate for the bottom 30% of households picked up to 5.5% from 4.9% in January 2021 and 2.1% in February 2020. The inflation rate for this segment was the fastest since the 6.3% reading in December 2018. — Lourdes O. Pilar

Pag-IBIG posts P31.18B net income in 2020

Members earn 5.62% dividend rate on Regular Savings, 6.12% on MP2

Pag-IBIG Fund posted a net income of over P30 billion in 2020 for the fourth consecutive year despite the economic slowdown caused by the pandemic, its top executives announced during the 2020 Pag-IBIG Fund Chairman’s Report held online Wednesday (March 03).

“I’m happy to report that our net income reached P31.18 billion last year, marking the fourth consecutive year that Pag-IBIG Fund’s net income surpassed the P30-billion mark. Pag-IBIG Fund’s strong showing despite the pandemic is a testament of how well the Filipino workers’ fund is managed. And, as we continue to support the call of President Rodrigo Duterte for government agencies to provide more social benefits to more Filipinos, we are giving back P29.40 billion, around 94% of our net income, to members in the form of dividends,” said Secretary Eduardo D. del Rosario who heads the Department of Human Settlements and Urban Development and the 11-member Pag-IBIG Fund Board of Trustees.

Under Pag-IBIG Fund’s charter, the agency is required to declare at least 70% of its annual net income as dividends which shall be credited proportionately to its members’ savings. However, the Pag-IBIG Fund Board approved to declare 93.68% of its earnings – more than what its charter requires and the highest in the agency’s history– to extend the most benefit to its members especially during these difficult times, del Rosario added.

With this move by its board, del Rosario also stated that members will enjoy a higher-than-expected return on their Pag-IBIG savings. He said that the year 2020 dividend rate for the Pag-IBIG Regular Savings shall be at 5.62%, while the Modified Pag-IBIG 2 (MP2) Savings shall be at 6.12%.

“Again, we have achieved yet another ‘highest ever’ in 2020. With dividends payout set at 93.68% of our P31.38 billion net income exclusive of net foreign exchange loss, it’s the highest dividend payout ratio in Pag-IBIG’s history. It’s also the highest dividend payout ratio our Pag-IBIG Fund Board can declare while still maintaining our target Capital Adequacy Ratio. Considering the challenges that we faced last year, achieving over P31 billion in net income is an achievement in itself. With such earnings and the dividend approval by our Board, we are extending the most benefit to our members without risking the strong financial standing of the Fund, especially during these difficult times,” said Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti.

According to Moti, Pag-IBIG Fund maintains a Capital Adequacy Ratio (CAR) of 15%, which is higher than the 10% threshold set by the Bangko Sentral ng Pilipinas (BSP) for the banking industry. Even if Pag-IBIG is not regulated by the BSP, Moti said that the agency voluntarily maintains a high CAR which includes a buffer to account for current economic challenges, to protect the funds of its members and to maintain the agency’s financial stability.

He also thanked borrowers who continued to pay their loans last year, despite the economic slowdown. In 2020, home loan payments reached P46.65 billion, while cash loan payments totaled P56.17 billion enabling the agency maintain its strong fiscal position.

“We would like to thank our borrowers for continuously honoring their loan obligations despite the pandemic. The strong financial standing of Pag-IBIG is a good sign because this allows us to continue funding our members’ home loans and cash loans, especially now when these are needed the most. By fulfilling their obligations, they are helping Pag-IBIG Fund bring needed service to other members, while continuing to stimulate the housing industry and the economy. As we brave the months ahead, we assure our members and stakeholders that we will remain a reliable institution that they can count on, which is what we have been doing every year in the last 40 years,” Moti added.

Inflation to taper off by 2nd half — BSP

A BusinessWorld poll of 16 analysts yielded a median estimate of 4.8% for February inflation, near the upper end of the central bank’s 4.3% to 5.1% estimate. — PHILIPPINE STAR/MICHAEL VARCAS

HEADLINE INFLATION will likely ease to within the target range by the second half, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Thursday, adding that monetary policy response would not be needed as risks arise from the supply side.

“We recognize that the factors explaining the elevated inflation is not due to the demand side but on the supply side — the rising oil prices, the rise in some food prices because of some factors. And so, we thought it does not require monetary response,” he said at a briefing.

“It would be beyond our 2-4% forecast for the first half of the year, but we are confident that it will taper off in the second half of the year,” he added.

Inflation spiked to a two-year high of 4.2% in January due to elevated oil and food prices.

A BusinessWorld poll of 16 analysts last week yielded a median estimate of 4.8% for February inflation, near the upper end of the central bank’s 4.3% to 5.1% estimate due to the continued increase in prices of oil and some food items.

Official February inflation data are scheduled to be released today.

The country is under a negative real interest environment with the key policy rate at 2% and January inflation at 4.2%.

The Monetary Board at its first meeting on Feb. 11 kept key policy rates untouched. Mr. Diokno has also said they would remain accommodative and hinted that discussions on a rate hike is “too early” for now.

“Monetary policy works with a lag and we cannot influence inflation over the near term. It’s the direct measures that will be able to do that,” BSP Department of Economic Research Senior Director Zeno R. Abenoja said.

He said the central bank supports nonmonetary measures that have been imposed to bring down commodity prices, such as price caps on pork and chicken products.

“Effective implementation of these nonmonetary measures should help anchor inflation expectations over the near term,” Mr. Abenoja said.

The central bank expects inflation to average 4% this year, much quicker than 2.6% in 2019. By 2022, they expect average inflation to ease at 2.7%.

Mr. Diokno said they continue to monitor developments related to higher inflation to gauge their monetary actions.

“For example, if this inflation is followed by increased demand and an event of higher wage rate, that is a concern,” he said.

The Monetary Board will holdits rate-setting meeting on Mar. 25. — Luz Wendy T. Noble

Monde Nissin files for record-breaking Philippine IPO

MONDE NISSIN CORP., the maker of Lucky Me! instant noodles, on Thursday filed for an initial public offering (IPO) to raise up to P63 billion ($1.3 billion), which could be the country’s biggest first-time share sale.

Based on its preliminary prospectus filed with the Securities and Exchange Commission (SEC), the Philippine food manufacturer is planning to sell as many as 3.6 billion shares at a maximum price of P17.50 apiece.

At $1.3 billion, the share sale would be the country’s largest IPO to date, based on data compiled by Bloomberg.

“The total proceeds to be raised by the company from the sale of the primary offer shares will be up to approximately P63 billion,” said Monde Nissin. Net proceeds are estimated at P60.4 billion.

If it fully exercises the overallotment option of as many as 540 million additional shares, Monde Nissin may raise as much as P72.5 billion from the IPO.

The food manufacturer said it would use the proceeds for its capital expenditures, loan repayment and other general corporate purposes.

Monde Nissin is known for making Lucky Me! instant noodles, SkyFlakes and Nissin biscuits, Dutch Mill yogurt drink and Mama Sita’s oyster sauce. In 2020, the company’s sales of instant noodles, biscuits, yogurt drinks and oyster sauce accounted for 68%, 30.5%, 73.2% and 56% of retail sales market share in the Philippines, based on Nielsen data.

Despite the pandemic, Monde Nissin’s net sales went up by 3.8% to P67.94 billion in 2020, from P65.45 billion in 2019. This was driven by a 5% increase in sales of noodles and beverages in the Asia-Pacific region, which offset a 1% drop in sales of meat alternatives.

This pushed the company’s net income 21.3% higher to P8.07 billion in 2020 from P6.649 billion in the prior year.

“The group believes it is well positioned to further pursue growth opportunities presented by the resilient Philippine market that features favorable demographics and consumption patterns including a young population, increased domestic household consumption (resulting from, among others, an increase in disposable income) and urbanization,” Monde Nissin said in the filing.

The company also owns Quorn Foods, which produces meat alternatives. It acquired the British ccompany behind Quorn in 2015.

“The Group believes traditional protein production is not sustainable and that it could help address food security and human health by increasing the production of Quorn to reach a wider consumer base,” Monde Nissin said.

UBS Group AG, Citigroup, Inc., Credit Suisse Group AG, and JPMorgan Chase & Co. have been tapped as joint global coordinators and joint bookrunners for the offering.

The company named BDO Capital & Investment Corp., BPI Capital Corp. and First Metro Investment Corp. as local lead underwriters. — KCGV with Bloomberg

Philippines slips in economic freedom ranking

The Philippines dropped three spots to 73rd out of 178 economies in a global ranking on economic freedom by The Heritage Foundation. — PHILIPPINE STAR/EDD GUMBAN

THE PHILIPPINES slid three spots to 73rd out of 178 economies in a global ranking on economic freedom by The Heritage Foundation, which took note of the government’s continued failure to address corruption and to ease trade restrictions.

The conservative American think tank in its 2021 Index of Economic Freedom said the country’s score slipped by 0.4 point to 64.1, mostly due to a decline in trade freedom. The country ranked 70th out of 180 economies in the previous year’s index.

The Philippines is in 12th place among 40 Asia-Pacific economies in the report assessing rule of law, government size, regulatory efficiency and open markets.

Above the global and regional average, the country’s score places it in the “moderately free” status for eight consecutive years. The data used for the 2021 index covered the second half of 2019 and the first half of 2020.

The Philippines’ trade freedom score fell by 7.4 points to 74.2 out of 100, the biggest drop among all the categories measured. Trade freedom measures the absence of tariff and nontariff barriers to goods and service trade.

“The Philippines has 10 preferential trade agreements in force. The trade-weighted average tariff rate is 5.4%, and 285 nontariff measures are in effect,” the Heritage Foundation said.

Investment and financial freedom scores were unchanged.

“Foreign investment is generally welcome, and the Investment Code treats foreign investors the same as it treats domestic investors. However, investment in several sectors remains restricted,” the Heritage Foundation said in the report.

The Philippines also dropped 1.3 points to 58.2 in business freedom under the regulatory efficiency category, with the report noting higher electricity costs and the recovery rate to resolve insolvency dropping.

“The regulatory environment is overly bureaucratic and costly for both businesses and investors,” it added.

Although marginally improving, the country’s lowest scores are still in judicial effectiveness and government integrity.

“Of special concern are weaknesses in the judicial system and the government’s failure to counter ongoing corruption effectively,” the foundation said.

“Courts are inefficient, biased, corrupt, slow and hampered by low pay, intimidation and complex procedures. Corruption and cronyism are pervasive. There is little accountability for powerful politicians, big companies, or wealthy families,” it added.

In a separate ranking, the Philippines slid two spots in a global corruption index released by Transparency International, which said minimal global progress in tackling corruption undermined the response to the coronavirus disease 2019 (COVID-19).

To improve economic freedom, British Chamber of Commerce of the Philippines Executive Director Chris Nelson sought investment liberalization measures. He also supported strengthening the Office of the Ombudsman to address corruption.

“Further digitalization of processes in the economy. The more it’s done by digital approvals, the less interface — it speeds up the process. It makes matters more transparent,” he said in a phone interview.

“The more we can move to that in all levels of government will be an aid to the economy and an improvement in economic integrity.”

Another business group supported the country’s recent inclusion in a mega-trade deal.

“Membership in the Regional Comprehensive Economic Partnership (RCEP), when ratified by the Senate, and ending the quarantine should increase trade in the future,” American Chamber of Commerce Senior Advisor John Forbes said in a mobile message.

RCEP is a trade pact that includes China, Australia, New Zealand, Japan, South Korea and all 10 member countries of the Association of Southeast Asian Nations (ASEAN).

Philippine Exporters Confederation Inc. (Philexport) President Sergio R. Ortiz-Luis, Jr., who also heads an employers group, proposed a slew of measures to address economic freedom.

In a phone interview, he said protocols on businesses during the lockdown should be streamlined and red tape should be addressed.

“The Anti-Red Tape Authority should review some more agencies,” he said in Filipino. He also cited unresolved issues surrounding trade, including safeguard duties recently placed on car imports to protect local jobs.

Car manufacturers are making their case against the duties as the Tariff Commission conducts its own investigation.

Mr. Ortiz-Luis said that “while we know that the President is serious (in addressing corruption), there are lapses in the lower levels. People doubt how serious this is because there’s still plenty of corruption going on.”

The Heritage Foundation, which is geared toward conservative public policy, defines economic freedom as the ability of people to control their labor and property.

Phl falls in economic freedom ranking

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