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Don’t let the door hit you on your way out, 2020

We should never let go of hope, and good news indeed appears to be on the horizon

AND SO it is upon us: the last breath of 2020.

The seemingly interminable year of heartache, disappointments, death, sickness, violence, natural calamities is coming to its inevitable close. A year marked by pain and suffering inflicted upon us by both ourselves and nature is now ready to be torn off from our walls and discarded in the trash bin like the much maligned 2020 planner that we almost never needed to use.

The recent deluge of news offers both hope and even more reasons to rue the year that should have been a lucky one. Yes, there are several vaccines available, but we don’t know when the Philippines will get any of them. While we wait with bated breath, social media exploded with a viral video of a double murder, starring a police officer. The long parade of horrors seemingly never ends.

As we plod on to Jan. 1, the irony is that we never quite managed to get, well, 20/20 vision on 2020. It was a rollercoaster ride that just jarred us from the get go. We got all the G forces and very little straights. How could we enjoy the view or even get a breather to focus when it was one haymaker after another?

If you’ve been a constant reader of this space, first, please accept my gratitude. You should also know that I’ve wanted to see how 2020 would pan out for the auto industry. From the direst days of the ECQ lockdown, we’ve seen the path to recovery — not a very clear-cut trajectory, but definable as it was directly impinged by the quarantine level and natural disasters (specifically a volcanic eruption and a slew of typhoons).

“There’s no way to go but up,” said dealer principal Vincent Licup, who is involved with the following brands (in alphabetical order): Chery, Chevy, Foton, MG, and Nissan. “The industry has stayed buoyant amid the waves. But of course, a lot is anchored on banks’ appetite to lend to consumers.”

If you talk to industry executives, this remains a common concern as loan facilities enable (depending on who you talk to) up to 80% of vehicle purchases. The role of finance institutions cannot be overstated. On the side of car distributors and brands, Mr. Licup said, “New models and better promos will propel the comeback.”

Continued the executive, “I’m confident that banks will renew their confidence on consumer financing next year, because it has the highest yield backed by a collateral (a vehicle). Second, they are in the business of banking; the only way to recover from losses is to lend. In fairness, interest rates were maintained.”

Meanwhile, Southgatemotors Ventures Corp. President and Auto Transport Ventures Managing Director Tey Sornet shared with “Velocity,” “Overall, the industry from January to November 2020 had a monthly average of 14,492 units or a -41.8% decline compared to the same period last year. We expect the total industry to finish the year 2020 at around 240,000 units or a decline of 42% compared to the full 2019 results of 410,000 units.”

Mr. Licup observed that the shuttering of hotels and schools in 2020 also negatively impacted vehicle sales. “The demand for vans disappeared. The number coding was also lifted, so the need for additional cars also dissipated.”

2021 HERE WE COME
Chamber of Automotive Manufacturers of the Philippines President Atty. Rommel Gutierrez confirmed to “Velocity” that 2021 will be a year of recovery for the auto industry, with a projected growth rate ranging from 20%-30%.

Mr. Sornet shared, “Our forecast for 2021 is at 320,000 units level or a growth of +33% compared to the result this year. It would be recovery year for the industry that has been greatly affected by the pandemic but would still be 22% below the peak level of 2019. This is mainly due to the continued weakness of the economy continuing to affect the demand and the appetite of the banks in approving auto loans.” I must add that the industry veteran has consistently been very vocal about how important it is for banks to loosen up and, well, start lending out to people again.

“Similar to the trend the past two years, we expect the top three next year to remain Japanese brands: Toyota, Mitsubishi and the brand we carry, Nissan. Their strong brand presence, proven quality and top-notch reliability is expected to keep them atop a very competitive market situation,” he continued.

Having said that, Mr. Sornet averred, “Chinese brands like MG, Foton, Chery, Geely would continue to be strong players next year with their striking designs, strong crossover lineup and attractive pricing. We expect the commercial vehicle segment to continue to increase its ratio of 34.60 versus passenger/SUV vehicles. Trucks, buses, van, and pickups will continue to be in strong demand.”

He also observed that smaller cars are now back to selling “at almost pre-pandemic levels.” This is indicative of a segment of the population “avoiding the use of public transportation.” Mr. Sornet anticipates this trend to continue next year.

For Atty. Gutierrez, the availability of that much-coveted COVID-19 vaccine can be the game changer — one that can enable the industry to realize a sharper growth trajectory. “It will definitely help restore confidence in the buying public,” he concluded.

Let’s cross our fingers and keep praying that tomorrow will be infinitely better than yesterday. We’ve had more than our share of sufferings this year.

Happy holidays, everyone. Keep safe!

Metro Manila Film Festival 2020: A whole new world

By Zsarlene B. Chua, Senior Reporter

MOVIE REVIEW
Magikland
Directed by Christian Acuna

CHRISTIAN ACUNA may have helmed Magikland, but for all intents and purposes, the fantasy-adventure film was a Peque Gallaga and Lore Reyes film, harkening back to more than two decades ago when Magic Temple premiered at the Metro Manila Film Festival in 1996, winning 14 of the festival’s prizes.

Magikland, while a tribute to the cinematic career of Peque Gallaga (fondly called by some the “Steven Spielberg of the Philippines” for his ambitious works) is also a look at what the Filipino industry is capable of: that with enough time and a big enough budget, it is possible for a film to almost completely be done with great computer-generated imagery (CGI).

Mr. Gallaga passed away in May of this year.

During a press conference for the Metro Manila Film Festival in November, Mr. Acuna and Mr. Reyes (who, along with Mr. Gallaga and Albee Benitez, served as the film’s executive producers) noted that the film is “95% CG” and that it took about three years to complete — post-production alone took two years said Mr. Acuna. The budget for the film also went beyond P100 million.

And it’s easy to see why. This is the best-looking made-in-the-Philippines CGI film I have seen — the movements of the dragons (there are two) were smooth and the detailing for the world of Magikland was beautiful.

It is such a pity that the film cannot be shown in theaters this year as it clearly was meant for a bigger screen than my smartphone.

Inspiration was clearly taken from fantasy series and film franchises like Lord of the Rings and Game of Thrones (the title scene of Magikland is especially reminiscent of the HBO series based on George R. R. Martin’s books). The film’s main villain is called Mogrodo-or (played by Jamir Zabarte) — in the Lord of the Rings, Mordor is the base of the main villain Sauron, though interestingly, Mogrodo-or’s styling is very similar to Grima Wormtongue, the slimy spy of the evil wizard Saruman.

But while I have nothing but praise for the film’s production design and special effects, it has its shortcomings, mainly its actors, and, in part, the story itself.

It’s a very simple story: four children are summoned to Magikland to help save that world from the clutches of Mogrodo-or who wants to sow discord and chaos. Each of the children has their own issues: Boy Bakunawa (played by Miggs Cuaderno) has a dying mother and an unsympathetic family; two sisters Mara Marapara (Elijah Alejo) and Pat Patag (Princess Rabara) have had their lives torn apart by the acrimonious separation of their parents; and Kit Kanlaon (Josh Eugenio) lives on the streets. Each of these issues are brought forward in the first few minutes of the story. After the children earned high scores on the video game Magikland, the four are summoned to the in-game world to actually save it. The bulk of the film focuses on the trials the four children undergo as they try to obtain powers and attempt to reconcile their issues in the real world.

But while the story is simple and uses much of “the savior of the world also has issues” trope, the child actors sadly, didn’t deliver. It was a lot of stilted dialogue and the most emotional scenes felt emotionless. Not even the presence of award-winning actors such as Jaclyn Jose (as Boy’s mother) and Bibeth Orteza (as the summoner and the children’s guide) was able to make the emotional scenes effective.

It should be worth noting that none of the leads of Magikland were nominated for Best Child Performer in the Metro Manila Film Festival Awards.

Acting issues aside, Magikland is worth a watch if only to see how a Filipino was able to finally create a beautiful CGI world and film.

And do stick around after the end-credits because there is a very poignant tribute to Mr. Gallaga that I think is, ironically, the most emotional scene of the entire film.

PLDT sees revenue boost from home broadband market

PLDT, Inc. expects the biggest percentage of revenue increases to come from the home broadband market next year.

“There is going to be a big push in the home broadband,” PLDT Chairman Manuel V. Pangilinan said in a press release on Saturday.

“Wireless, we expect to grow, even in the enterprise, despite the impact of the pandemic on the enterprise sector of our economy. They grew this year by three percent and by 2021 they should grow by a percentage higher.”

The PLDT group will be using its integrated telecommunications in wireless and fixed connectivity as well as pay TV to compete, Mr. Pangilinan said.

Dito Telecommunity Corp., led by Dennis A. Uy, is scheduled to launch in March next year after it had put up almost 1,900 cell towers.

Moody’s Investors Service earlier this month said that it expected telecommunications revenue growth of emerging economies like the Philippines to remain stable in 2021. It said that increasing data consumptions and broadband use would continue to drive revenue growth, although this would be offset in part by lower demand in voice and messaging services.

Moody’s added that competition from the entry of Dito Telecommunity would weigh on growth. It said that telco revenue would grow 3.5%-4% next year for the entire Asia-Pacific region.

The PLDT group allocated P92 billion in capital expenditures (capex) for next year. The company expects P70 billion in capex for 2020, while its capex from 2011 to September 2020 reached P432 billion.

Smart Communications, Inc., PLDT’s wireless arm, plans to upgrade 40% of its sites to fifth generation (5G) by the end of next 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. — Jenina P. Ibañez

Bond traders close out year with 1% in sight

TREASURY traders are buzzing about 1% yields again, with all eyes on whether a massive slate of auctions next week and two key US Senate runoff elections in early January could get them there.

Rates on 10-year notes got as high as 0.971% on Wednesday after investors shifted out of bonds as Brexit negotiations looked headed for resolution, something that did indeed arrive on Christmas Eve. And major catalysts ahead — a trio of US auctions totaling a record $176 billion amid low liquidity in a holiday-shortened week, plus the Jan. 5 vote in Georgia — could further diminish the appeal of Treasuries, increasing rates.

The widely watched 10-year yield has largely trended higher this month, but has failed to break through the 1% level last seen early in the pandemic.

Democrats winning both Senate seats — and therefore control of Congress — could cause this rates barrier to fail, since the party appears more willing to unleash fiscal stimulus that gets the US economy on solid footing.

The elections’ outcome “could increase movement in that direction, but 1% is a big point of resistance,” said Tom Martin, a senior portfolio manager at Atlanta-based asset manager and investment adviser Globalt Investments. Still, “Georgia is the next big news item to watch.”

There’s plenty of reasons why the 10-year rate, a benchmark for long-term borrowing costs and weather vane for investor sentiment, might miss the mark once again. One is that the Federal Reserve is keeping policy rates near zero for a prolonged period, while reserving the option to hold down long-term rates if needed. Another is that the still-raging coronavirus is casting doubt on the ability of the US and global economies to return to normal anytime soon.

Over the past week, the Treasury options market has seen increased activity for the time period covering early 2021, which captures the Georgia runoffs in which voting is already underway. Higher levels of implied volatility in the market reflect the view that a Democratic win of both races, which would give the party full control of Congress plus the White House, would put more aggressive fiscal stimulus on the radar — and raise the risk of a sharp selloff in the long end of the bond market.

Meanwhile, aggressive contrarian bets have emerged, leaning against a Democratic sweep that produces a rout. Those wagers stand to pay out if there’s just a small rise in the 10-year rate, capped at around 10 basis points from the current level of 0.92%. That may still be enough to put the yield over 1%, though just barely.

Those options expire toward the end of January and into mid-February, so the coming week’s auctions could also impact those positions. That should give bond traders a lot to ponder on their return from the Christmas holiday.

A key level to watch for the 10-year rate is around 0.973%, according to William O’Donnell, a Citigroup Inc. rates strategist. “There’s been a ‘barrier of demand’ there in the recent past and the question is, ‘will it emerge again during holiday-like dealing conditions?’” — Bloomberg

Mayor of major French fishing port warns of Brexit deal risks

PARIS — The Brexit trade deal still leaves French fisherman facing a host of unknowns, warned the mayor of the major northern fishing port of the Boulogne-sur-Mer on Friday.

British Prime Minister Boris Johnson said on Thursday, as he presented the last-ditch accord, that his country had agreed a “reasonable” five-and-half-year transition period with the Eurepean Unioin (EU) over fisheries, longer than the three years Britain wanted but shorter than the 14 years the EU had originally asked for.

But Boulogne-sur-Mer Mayor Frederic Cuvillier said the agreement left much obscured.

“Relief for our fishermen, but what will be the impact on stocks? Who, for example, will be handling the controls? And over what time?” he told Europe 1 radio.

“The only certainty today is that we need to find, during the transition period, more deals within the deal.”

Mr. Cuvillier’s views were echoed by French politicians Loïg Chesnais-Girard and Herve Morin, whose responsibilities cover the Normandy region bordering the English Channel.

Mr. Chesnais-Girard and Mr. Morin issued a joint statement welcoming the fact that a Brexit “no-deal” had been averted, but also calling for a meeting with French Prime Minister Jean Castex to analyze more of the details.

French fishermen had lobbied President Emmanuel Macron not to give an inch over fishing rights, but his government dropped initial demands to maintain the status quo.

French Seas Minister Annick Girardin issued a statement to say the government would set up financial measures to help French fishermen affected by the Brexit trade accord.

There has also been discontent across the English Channel, with Britain’s fishing industry expressing disappointment that the deal did not represent more of a reduction in the access that the European bloc currently has to British waters. — Reuters

Metro Manila Film Festival 2020: All in the family

By Zsarlene B. Chua, Senior Reporter

MOVIE REVIEW
Coming Home
Directed by Adolf Alix, Jr.

WHILE I wrote in the Magikland review on this page that it was a pity that the movie wasn’t able to get a full theatrical release as the film was absolutely meant to be seen on the big screen with high quality surround sound, in contrast, the family drama Coming Home is perfect as a TV movie or afternoon drama as the cluttered storyline often left me wondering if I had missed something.

Magikland’s faults rests on the ineffectiveness of its child actors, but Coming Home has no such issues — in fact, the whole cast (with the exception of its lead star Jinggoy Estrada, playing the sick father) delivered and proved their acting chops, especially Sylvia Sanchez as the long-suffering matriarch and mother to five children.

The story is straightforward — or it should have been: A sick father, who abandoned his family for a decade (an OFW in Saudi Arabia, he fell in love with a nurse and lived with her), returns to his legal family and his wife welcomes him with open arms while four of the five children, traumatized by his leaving, are understandably angry.

Complications arise as each person in the family has their own issues as well: one daughter (played by Shaira Dizon) is a newly married yet battered wife; a son (Martin del Rosario) is having an affair with a married woman; another son (Edgar Allan Guzman) has just returned after being lost at sea after his ship was attacked by pirates; and the mother is hiding an issue of her own. Oh, and actually there were six children — the oldest one died prior to the events in the movie (to make it worse, the eldest child donated a kidney to his father who eventually abandoned them for another woman.)

The remaining two children — played by Vin Abrenica and Julian Estrada — have no complications in their lives. Interestingly, the only child who doesn’t have an issue with the return of their father is played by Julian Estrada, Mr. Estrada’s son in real life. The eldest child who died is played by Jake Ejercito, a half sibling of Mr. Estrada.

There was a lot of build-up over the animosity and reconciliation of the family but none of the scenes ever explained why Mr. Estrada came back (or maybe this writer missed it because streaming on Upstream wasn’t the smoothest experience — I had about six crashes while watching the film), or why the mistress (Ara Arida) even gave him back when he had a child with her too.

The multiple issues surrounding the children were also rushed through and the resolutions half-baked, which made one wonder if the script was originally intended as a multi-part drama series.

Ms. Sanchez delivered some of her best work in Coming Home, as a protective mother to her abused daughter and a mother grieving over her lost child, she was very real and raw. The same goes for all the children, whose anger and resentment against a missing father shone through the screen.

The same cannot be said for Mr. Estrada who could not even summon a tear upon hearing of the death of his eldest, the one who gave him his kidney. His best friend, played by Smokey Manaloto, showed grief better in the same scene.

Coming Home wanted to be a heartfelt film about how family must stick together and that family is best, and it was — if you take out Mr. Estrada’s character out of the picture and focus instead on how Ms. Sanchez kept her family together even though the father left them. That, to this writer, would have been a more compelling story.

Updated Toyota Yaris now available for reservation

TOYOTA MOTOR Philippines (TMP) closes 2020 by revealing the 2021 update to the Yaris hatchback. “It’s been a jam-packed year for Toyota this 2020,” said TMP Vice-President of Marketing Services Elijah Marcial in a release. “But we’ve got one last exciting model this year that we’re sure many Filipinos will enjoy.”

Ms. Marcial added that the Yaris appeals to “many married professionals in their mid to late 30s looking for a modern fun-to-drive vehicle that offers the great cargo space a hatchback offers.”

A longtime nameplate, the Yaris, continued the executive, “has amassed quite a loyal fan base for being synonymous with fun driving and flashy looks, and this year we’ve elevated it with a new premium eye-catching design to suit our customers’ evolving style. All without, of course, compromising on the power, convenience, and safety we’ve all come to expect from every Toyota.”

The Toyota Yaris sports a new front grille, flanked by new LED fog lamps across all variants. The 1.5 S CVT variant’s headlamps are LEDs complemented by new daytime running lights (DRL). All trims get new 15-inch two-tone machine-finish alloy wheels. The updates extend up to the interiors with Apple CarPlay and Android Auto, now a standard feature across all variants, and synthetic leather seats for the 1.5 S CVT variant. A new exterior color, Cyan Metallic, also makes its debut.

Apple CarPlay and Android Auto now comes standard. Customers who opt for the 1.5 S CVT variant get smart entry and a push start system. The variant also comes with new synthetic leather seats and boasts a six-speaker system.

Toyota dealerships are now accepting reservations, with retail sales in the 70-strong network starting on Jan. 13, 2021. Check out the Yaris’ full specs and product highlights, plus calculate payments, and submit inquiries direct to any preferred dealer via https://toyota.com.ph/yaris.

For more information on the New Yaris, visit TMP’s official website at www.toyota.com.ph and follow the official social media pages at ToyotaMotorPhilippines (Facebook and Instagram), @ToyotaMotorPH (Twitter), and Toyota PH (Viber and Telegram).

Audi Sport looks back at winning 2020 campaign

AUDI SPORT factory and customer teams capped off the 2020 racing season with a record number of successes achieved despite a truncated calendar because of the COVID-19 pandemic.

The high-performance division of Audi AG is not only involved in motorsports but leverages the learning in the field to develop and produce the road-going RS models that lead their respective product lines in the Audi range. Included among these models are the RS 3 Sedan, RS 6 Avant, RS Q8 and R8 — which are all set to arrive in the Philippines this month and early next year. Other current RS models count in the RS 4 Avant, RS 5 Coupe, RS 5 Sportback, RS 7 Sportback, TT RS Coupe, TT RS Roadster, RS Q3 and RS Q3 Sportback, a number of which will also be introduced in the country throughout 2021.

Audi Sport customer teams clinched 12 drivers’ championships, 22 class titles, 122 victories and 361 podium finishes in the 478 races around the world. The results are comparable to Audi Sport customer teams’ records in the previous year’s full season of racing. On its fourth year in the hugely popular TCR touring car series, Audi Sport customer teams using the RS 3 LMS in 2020 won titles in the world championship, European championship, and the TCR series in Germany and New Zealand.

Various Audi Sport customer teams in TCR this year competed in 219 races, winning 49 of them and taking to the podium a total of 159 times.

The other Audi Sport customer teams using the R8 LMS in the GT3 class won 48 out of the 151 races they took part in, and clinched 139 podium places. This means that Audi Sport has won nearly every third race in the international league, and scored at least one podium finish in almost every competition.

Audi Sport customer teams in the GT 3 class also secured seven drivers’ titles, including that scored with the Belgian Audi Club Team WRT in the prestigious GT World Challenge Europe Sprint Cup, plus eight other class championships.

In the GT 4 class, Audi Sport customer teams campaigning the R8 LMS GT4 this year surpassed their record in 2019 by winning 22% of the races in which they took part (the success rate last year was 18%). At the GT4 France series, Audi Sport Sainteloc Racing won the Pro-Am class for a historic third consecutive time.

Also included among other Audi Sport customer teams’ achievements this year are the drivers’ crowns won in the new Audi Sport Asia Trophy and in the Audi Sport Seyffarth R8 LMS Cup in Europe.

Meanwhile, Audi Sport’s factory involvement with the top-level DTM race series concluded with the RS 5 DTM setting numerous records. By scoring 28 victories, 95 podium finishes and a total of six drivers’, manufacturers’ and teams’ class titles, the RS 5 DTM has emerged as one of the most successful race cars in Germany’s touring car championship. In 2019 and 2020, the RS 5 DTM won 28 of 36 races in the series, and took 95 out of 108 possible podium finishes. Added to this are 29 pole positions and 28 fastest race laps. The DTM finale of the 2020 season saw all six factory-fielded RS 5 DTM cars finishing in the top six places. This year, the RS 5 DTM allowed Audi to clinch the DTM manufacturers’ crown with six races still left in the season.

SM Prime’s rebound hinges on holiday boost

DESPITE the lack of catalyst during last week’s shortened trading, SM Prime Holdings, Inc. is expected by analysts to recover on the back of holiday spending as well as the gradual reopening of the economy.

A total of 26.73 million shares worth P1.022 billion were traded from Dec. 21 to 23, making SM Prime the third most actively traded issue last week, data from the Philippine Stock Exchange showed.

Financial markets were closed on Dec. 24 and 25 in observance of the Christmas holidays.

Shares in the Sy-led property developer inched up by 1.7% to P38.55 apiece last Wednesday from the P37.90 finish last Dec. 18. The stock has risen by 67.6% since the start of the year.

China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said SM Prime’s movement last week was largely in line with the performance of the property sub-index, which also traded sideways.

“No notable company development this week, trading was mostly influenced by index fund flows and technical factors,” Mr. Mercado said in an e-mail interview.

Meanwhile, SM Prime unveiled on Dec. 18 its plan to issue 2.5- and five-year P5-billion fixed-rate bonds with an oversubscription option of up to P5 billion.

This will be the second tranche of bonds issued under its P100-billion fixed-rate bonds shelf registration approved by the corporate regulator last February.

Local debt watcher Philippine Rating Services Corp. assigned these planned papers the top credit rating of “PRS Aaa,” which means that the company is expected to have an “extremely strong” capacity to meet its financial obligations.

“SM Prime plans to use the investments to fund new malls and other expansion projects, which may include reclamation project,” COL Financial Group, Inc. Senior Research Manager Richard G. Laneda said in an e-mail.

At present, SM Prime has 74 shopping malls in the Philippines with 8.5 million square meters (sq. m.) of gross floor area. It also has seven malls in China with 1.3 million sq. m. of gross floor area.

It has 51 residential projects — 40 in Metro Manila and 11 outside the capital region.

SM Prime’s property portfolio includes 12 office buildings with a combined gross floor area of about 708,000 sq. m. as well as four convention centers, three trade halls, and eight hotels.

SM Prime’s consolidated revenues dipped by 28.6% to P60.69 billion as of September this year amid the lockdown measures to contain the spread of the coronavirus that temporarily closed business establishments such as malls.

Its attributable net income during the January-September period was nearly halved to P14.37 billion from P27.60 billion last year.

Mr. Mercado expects SM Prime to recover amid the holiday spending season.

“Profitability should continue to improve over the next quarters and in 2021 (vis-a-vis 2020) especially given the outlook for economic recovery (e.g., recovery in demand, continuing relaxation of quarantine measures, vaccine rollout),” he said.

“However, possible impacts of the growing adoption of e-commerce (vis-à-vis shopping in malls) to SM Prime’s mall segment remain to be seen. Continued deployment of capex for new projects should also buoy profitability down the line as these developments come online,” Mr. Mercado said.

Mr. Laneda, meanwhile, sees rental concessions to be slowly rolled back starting next year.

“Online sales [are] not a threat, but will mostly complement brick-and-mortar businesses as the SM Group is taking advantage of online channels,” Mr. Laneda said.

As the economy slowly opens up, he expects SM Prime’s net income to be higher next year, pencilling in a bottom line of P34.7 billion.

For this week, Mr. Mercado sees SM Prime trading with a support level of P37.35 and resistance ranging from P39.00 to P39.50. — Ana Olivia A. Tirona

China signals GM, biotechnology push in key policy statement

SHANGHAI/BEIJING — China will industrialize biotech breeding as part of a campaign to improve food security, top leaders said in a policy statement late on Friday, signaling Beijing could soon take a further step towards commercializing genetically modified (GM) crops.

According to a statement issued after the annual Central Economic Work Conference held on Dec. 16-18, China needs to make better use of science and technology to achieve a “turnaround” in its seed industry.

“The key to ensuring food security lies in implementing the strategy of storing grain in the ground and storing grain in technology,” according to the statement, published by the official Xinhua news agency.

The statement identified the seed industry and the state of China’s arable land as major priorities over the next year. It said the country needed to prevent the misuse of land and build a “national food security industrial belt”.

Beijing has invested heavily in GM research and development, and it made a breakthrough last year when it decided to issue biosafety certificates for domestic strains of genetically-modified soybean and corn.

However, it has been cautious when it comes to the commercialization of GM crops.

Though the statement did not refer specifically to GM, analysts said it emphasizes the role new technology must play in China’s food security efforts, now a major priority as the country tries to insulate itself from trade disruptions and ensure it makes the most of its scarce farmland.

“The meeting proposed the orderly advance of the industrialization of biotech breeding,” said Mao Yifan of Industrial Securities.

“With the combination of the arrival of genetically-modified corn strains at the end of 2019 and the significant increase in corn prices, genetically-modified corn seeds with improved efficiency will be promoted or accelerated in China,” Mao added.

The Central Economic Work Conference is an annual gathering in which top leaders and policymakers plot the country’s economic course for the following year.

HK’s New Year countdown celebration goes online

THE COVID-19 pandemic is not going to stop the Hong Kong Tourism Board (HKTB) from sharing the city’s New Year’s Eve celebration with the rest of the world. This New Year’s Eve, for the first time, the HKTB’s signature “Hong Kong New Year Countdown Celebrations” will go online, with people around the world able to attend via their mobile phones or computers. On Dec. 31, the HKTB’s website (discoverhongkong.com) and social media platforms (Facebook and YouTube) will begin showing a live countdown clock at 11 p.m. (HKT) and 11:30 p.m. (HKT) respectively. Once the clock strikes midnight, a two-minute video showing Victoria Harbour as well as iconic landmarks in Hong Kong will follow, along with festive greetings sending blessings to the world.

Yields on government debt end flat

YIELDS ON government securities (GS) ended flat last week with investors focusing on repositioning their bond holdings and digesting new developments on the coronavirus vaccine and the US economy as they gear towards the yearend.

On average, GS yields were down by a basis point (bp) week on week, according to the PHP Bloomberg Valuation Service Reference Rates as of Dec. 23 published on the Philippine Dealing System’s website.

At the secondary market on Friday, yields on the short-end and belly of the yield curve rallied while those in the long-end marginally increased. The rates on the 91-, 182-, and 364-day Treasury bills fell by 1.5 bps, 0.7 bp, and one basis point, respectively, to 1.131%, 1.427%, and 1.713%.

At the belly of the curve, yields on the two-, three-, four-, five-, and seven-year Treasury bonds dropped by 1.3 bps (1.878%), 3 bps (2.120%), 3.7 bps (2.337%), 2.6 bps (2.534%), and 0.3 bp (2.805%).

On the other hand, the 10-, 20-, and 25-year bonds saw their yields go up by 2.4 bps, 0.2 bp, and 0.1 bp, to end with 3.008%, 3.896%, and 3.879%.

“[The movement was due to investors] repositioning ahead of the holidays, but yields are generally lower as the market focuses on [the] timing of vaccine availability, which has implications on growth,” a bond trader said through a Viber message.

In an e-mail, another bond trader attributed the yield movements last week to developments abroad, particularly the US Congress’ endorsement of a second stimulus bill and “renewed market concerns following the discovery of a more infection strain of COVID-19 (coronavirus disease 2019) in the United Kingdom.”

Last week saw the US Congress approving a stimulus package worth nearly $900 billion that would provide a boost for the world’s biggest economy that is also among the hardest-hit by the COVID-19 pandemic. The package is part of a $2.3-trillion bill of which $1.4 trillion is allocated for government spending for the coming year. President Donald J. Trump is expected to sign the legislation once it reaches his desk. However, he has threatened not to sign it as he wants Congress to put a bigger amount in the stimulus checks.

At home, the Philippines last Wednesday banned inbound flights from the United Kingdom (UK) effective the following day until year-end after a rapidly spreading coronavirus strain caused cases to soar there. Other countries in Europe have also closed their doors to British travelers after the UK tightened its COVID-19 restrictions for London and nearby areas.

Scientists first discovered the new strain, which they said is 70% more infectious, in a patient in September.

Last month, the government in partnership with private sector players inked a deal with AstraZeneca for 2.6 million vaccine doses worth P700 million. The deal was fully funded by businesses and is expected to reach the country by the second quarter of next year, to inoculate about 1.5 million Filipinos.  Moreover, the government is also expecting to finalize a deal to procure vaccines from Chinese drug maker Sinovac Biotech Ltd., according to National Task Force Against the COVID-19 chief implementer Carlito G. Galvez, Jr. earlier this month. It is also in talks with the Serum Institute of India Ptv. Ltd. for the supply of 30 million doses of Covovax.   

The government is currently seeking a $325-million (P15.63 billion) loan from the Asian Development Bank (ADB) to purchase COVID-19 vaccines, ADB Country Director for the Philippines Kelly Bird said last Monday.

The bond trader expects the remaining days of this year to be “quiet with a downward bias on yields.”

The second bond trader also expects market volumes to be “generally thin” towards the final trading days of the year, but substantial market-moving developments that would potentially affect the economic outlook for next year “might continue to influence the last trading days of the year.”

“For next year, yields are broadly expected to rise especially on the longer end of the yield curve as the gradual resumption of economic activity might revive inflation expectations. The same optimism on economic recovery might also drive investors away from safe-haven bonds towards riskier assets such as equities. However, short-term yields might remain subdued as the BSP (Bangko Sentral ng Pilipinas) is likely to keep policy rates low to provide an accommodative monetary policy during the country’s economic recovery,” the bond trader added. — Jobo E. Hernandez

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