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PHL may see worst slump in ASEAN

The Philippine economy plunged into recession in the second quarter, as the lockdown halted economic activity.  — PHILIPPINE STAR/MICHAEL VARCAS

PHILIPPINE gross domestic product (GDP) is expected to shrink by 8% this year, the steepest projected decline among economies in Southeast Asia, according to Fitch Ratings.

“Renewed lockdown measures in and around the capital of Manila have been implemented, which will depress economic growth by much more than we had anticipated,” Fitch Ratings said in a note sent to reporters on Tuesday.

The credit rater’s latest forecast for the Philippine economy is worse than the -4% it penciled in last June and the -4.5 to -6.6% projected by the government. The economy already plunged into recession after GDP shrank by 16.5% in the second quarter.

Metro Manila and some surrounding provinces were placed under tighter lockdown restrictions for two weeks in August to slow the surge of coronavirus disease 2019 (COVID-19) infections.

Among the Association of Southeast Asian Nation (ASEAN) economies, Fitch had the worst outlook for the Philippines this year, followed by Thailand (-7.8%), Singapore (-6%), Malaysia (-2.5%), and Indonesia (-2%). Vietnam’s economy is projected to grow by 2.8% this year.

Fitch’s -8% GDP outlook for the Philippines and Maldives is the third worst among Asia-Pacific economies, after the -40% GDP forecast for Macao and -10.5% projection for India.

For Asia-Pacific, Fitch said GDP growth will revert to positive territory in the second half as lockdowns ease and external demand slowly picks up. It sees Asia-Pacific GDP shrinking by 1.1% in 2020, compared to a global contraction of 4.4%.

“The strength of the regional pickup, however, will be constrained by the risk of new coronavirus outbreaks…. Activity appears to be recovering even in countries where the virus continues to spread rapidly, including India, Indonesia and the Philippines, underpinned by the easing of lockdown measures and policy support,” Fitch said.

The Philippines remains the epicenter of the coronavirus disease 2019 (COVID-19) in Southeast Asia, with 241,987 cases as of Tuesday.

REBOUND
Fitch expects the region to bounce back in 2021, with the Philippine economy seen to grow by 9%.

“Countries highly reliant on tourism receipts, such as the Maldives and Thailand, will face a delay in their recovery, while those dependent on remittances, such as Bangladesh and the Philippines, may also take time to recover,” it said.

Cash remittances grew 7.7% year on year to $2.465 billion in June, but year-to-date flows dropped 4% to $14.019 billion, central bank data showed.

More than 164,000 overseas Filipino workers have already been repatriated due to the crisis, according to the Department of Foreign Affairs. The Bangko Sentral ng Pilipinas expects cash remittances to fall by 5% this year.

Fitch said the Philippines’ “BBB” rating with a stable outlook is underpinned by the country’s fiscal and external buffers with its relatively low debt-to-GDP ratio prior to the pandemic, its net external creditor position, and still strong medium-term growth prospects”

“However, these buffers are being eroded by the pandemic-related economic shock, although there is room to accommodate some deterioration in the fiscal outlook,” Fitch said.

The country’s national debt-to-GDP ratio was at 39.6% in 2019. This year, the government projects this to rise to 53.9% due to the pandemic.

Meanwhile, the general government debt-to-GDP stood at 34.1% in 2019, which is much lower than the 42.2% median for BBB-rated countries, Fitch said. This is projected to increase to 47.8% this year, 49.8% in 2021 and 50.1% in 2022.

Fitch flagged some “negative sensitivities” for the Philippine rating, including reversal of policy reforms that could weaken the economy; and the deterioration in the asset quality of banks that would lead to stress in the financial system. — Luz Wendy T. Noble

Private sector asks gov’t to detail recovery plan

The private sector is urging the government to streamline policies on mobility amid the pandemic. — PHILIPPINE STAR/MICHAEL VARCAS

THE private sector is asking the government for a six-month plan detailing how the Philippines can bounce back from the devastating impact of the coronavirus disease 2019 (COVID-19).

“To effectively combat this health crisis, the government needs to provide a clear and comprehensive 6-month plan that thoroughly describes the concrete plan, steps, and actions that government will take that will help the country survive and bounce back,” Philippine Chamber of Commerce and Industry (PCCI) National Capital Region Area Vice-President Delia B. Jimenez said during the Sulong Pilipinas online event on Tuesday.

“We are all in this together. With the government and the rest of the country, we too will fight to achieve a quick and solid economic recovery,” she added.

At the top of their list is a request to improve mobility despite the various quarantine protocols being implemented around the country. They asked the Inter-Agency Task Force on Emerging Infectious Diseases, Department of Interior and Local Government (DILG) and the Armed Forces of the Philippines to synchronize their policies and coordinate with local governments.

The business group also called on the Trade and Transportation departments to come up with measures to boost freight and logistics capacity, particularly to help the manufacturing sector.

The private sector is also asking for assistance for the services sector, particularly the struggling tourism industry. This includes a request for policies and a roadmap to directly assist the industry as the economy gradually opens.

They also asked for a roadmap on developing nationwide digital infrastructure, which they said should be included in the budget for 2021.

Another recommendation was for the Economic Development Cluster to assist private firms that opt to retain employees instead of implementing layoffs.

To create jobs, the private sector asked for partnerships with government institutions like the Technical Education and Skills Development Authority to train, upskill, and certify returning Overseas Filipino Workers.

The private sector asked that Congress fast-track the passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), which would immediately cut corporate income tax to 25%.

Another recommendation was for the establishment of an online  business registration system that will allow interconnected processing among agencies by 2021.

The private sector also said processes for infrastructure development should be streamlined by next year to encourage more investments, and that agriculture farm-to-market access be improved through value chain interventions, digitalization, and added technologies by the end of the year.

In his response, Finance Assistant Secretary Antonio G. Lambino II said that the government is accepting the recommendations, which they will share with the relevant government agencies for consideration.

“Businesses have the sectoral expertise, organizational capacity and foresight to create progressive solutions in various areas of development,” he said.

The Philippine economy fell into its first recession in 29 years when gross domestic product shrank by 16.5% in the second quarter when nearly all economic activity was shut down during the lockdown.

INFRASTRUCTURE SPENDING
Meanwhile, the government is pinning its recovery hopes on its “Build, Build, Build” infrastructure program.

“Metro Manila stands to benefit from major infrastructure projects in the ‘Build, Build, Build’ program. For too long, the capital has suffered from one of the worst traffic conditions in the world, affecting the daily lives of commuters and the cost of doing business,” Finance Secretary Carlos G. Dominguez III said in his speech at the Sulong Pilipinas forum Tuesday.

“The government’s massive infrastructure spending in Metro Manila will relieve these pain points while generating employment and business opportunities across sectors as well as fostering interregional connectivity,” he added.

Based on a study launched September 2019, the Asian Development Bank (ADB) said Metro Manila ranked the most congested city in developing Asia.

The ADB attributed the urban congestion to lack of efficient and affordable public transportation.

The government allotted a P1.1-trillion budget for infrastructure next year, up 41% from the reduced P785.5-billion budget this year after the government redirected some funds to its pandemic response. The accelerated infrastructure program was also part of the recovery program of the government as it generates jobs and has a huge multiplier effect.

Mr. Dominguez identified several key infrastructure projects that will ease the congestion in the capital, including the 36-kilometer Metro Manila Subway and the Metro Manila Skyway Stage 3 project. — Jenina P. Ibañez and Beatrice M. Laforga

Philippines unlikely to have nuclear power plant by 2029

The Duterte administration is looking at introducing nuclear energy into the country’s power mix. — REUTERS

THE Philippines is unlikely to have an operational nuclear power plant over the next decade despite the government’s move to revive the sector and increasing calls to shun the use of coal, according to Fitch Solutions Country Risk and Industry Research.

In July, President Rodrigo R. Duterte issued Executive Order No. 116 which authorized a study on the viability of nuclear energy as a power source.

“(W)e maintain our forecasts that no nuclear capacity will come online in the country over the coming decade, and will only seek to revise it if we see concrete project developments going forward,” Fitch Solutions said in a recent commentary.

It cited high capital costs and safety considerations as the main challenges to the development of the nuclear power in the country.

Nuclear power projects “often face long lead times and a high risk of substantial delays (10 to 15 years),” it added.

“(E)ven if a decision would go through, we remain cautious on factoring in its entry into commercial operations within our forecast period to 2029,” Fitch Solutions said.

The government is also considering restarting the mothballed 621-megawatt Bataan Nuclear Power Plant (BNPP), although some sectors have raised concerns.

“Numerous issues ranging from health, environment, economics, nuclear contamination, as well as the unsolved problem of nuclear waste disposal are grave concerns that should be taken into considerations by our energy officials before we should think of opening the BNPP,” Bayan Muna Party-list Rep. Carlos I. Zarate said in a statement last month.

The Department of Energy (DoE) admitted that before the country can benefit economically from nuclear power generation, it must first address infrastructure gaps and satisfy the 19 requirements prescribed by the International Atomic Energy Agency (IAEA), the global authority in nuclear development.

Energy Secretary Alfonso G. Cusi in August told reporters that the country is almost through with these requirements, although legislative and regulatory frameworks have yet to be passed. Six measures on nuclear power are pending in different House committees, while a counterpart bill in the Senate has not been filed.

The DoE is pushing for the development of nuclear power to augment the country’s energy supply and help protect consumers from traditional power price volatilities.

Fitch Solutions recognized nuclear power as “an effective solution to meet the country’s rising power demands over the coming decade, due to its high capacity factors as a baseload resource.”

It projected a 4.6% annual average increase in power consumption between 2020 and 2029, driven by strong macroeconomic and demographic growth and the goal to reach 100% total electrification by 2022.

The interagency body tasked to assess the viability of nuclear energy hopes the government can adopt a national position on the power source to be included in the generation mix by yearend, according to Mr. Cusi.

Meanwhile, coal will still dominate the Philippines’ power generation mix over the next decade, increasing its share to 60.2% from 54.6% in 2019, as it remains to be “the cheaper and more reliable option” to meet the surge in power demand, according to Fitch Solutions.

It also noted the latest revision of the Philippines Energy Plan still focused on coal expansion. The DoE is still updating the country’s energy blueprint, which seeks to add more than 40,000 megawatts of power by 2040.

“Renewables have also faced many headwinds in development, and we do not expect a substantial ramp up in this regard. As such, we expect the Philippines’ power mix to remain dominated by coal over the coming decade…. However, should nuclear power be reintroduced, coal will likely be the first generation type to face cuts, due to the increasing structural risks and ongoing public oppositions,” Fitch Solutions said.

In June, the House Climate Change Committee passed a resolution seeking to ban new coal plants. Big local power companies like Ayala-led AC Energy, Inc. and Manila Electric Co. (Meralco) also vowed to gradually turn away from coal power generation.

Earlier this year, about 42 faith-based groups around the world expressed their intention to withdraw $1.4 billion in fossil fuel investments. — Adam J. Ang

PERA pushed as state pensions not enough for retirees

Only 20% of the 7.6 million Filipinos aged 60 years and above are covered by state-backed mandatory pensions, data from the Philippine Statistics Authority showed. — PHILIPPINE STAR/MICHAEL VARCAS

THE government targets to have five million Filipinos with personal equity and retirement accounts (PERA) in the next five years, as it launched an online platform to make it easier for them to invest.

“The target seems ambitious. But with more than 40 million locally employed Filipinos prior to the pandemic and around 2.2 million overseas Filipino workers, I am optimistic that this goal is easily attainable,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said at the launch of the digital PERA on Tuesday.

Republic Act 9505 or the PERA law aimed to encourage Filipinos to save up for their retirement with the new investment tool. It is designed to complement the mandatory contributions made by public and private sector workers. The PERA law was passed in 2008 but only implemented starting December 2016.

With the digital PERA platform, Filipinos can open and access their PERA accounts anytime using a mobile gadget. PERA contributors can add to their investments through InstaPay and other digital means.

PERA also offers tax incentives such as a five percent income tax credit on contributions which could be utilized for settling their income tax liabilities.

Mr. Diokno noted only 20% of the 7.6 million Filipinos aged 60 years and above are covered by state-backed mandatory pensions, citing data from the Philippine Statistics Authority. Retirees on the average receive a monthly pension of P5,123 from the Social Security System and P18,525 from the Government State Insurance System.

“According to a recent survey, we Filipinos tend not to prepare for their own retirement. Specifically, Filipinos only set aside 3.6 months’ worth of income for retirement — way below the regional average of 2.9 years. In terms of expectation, Filipinos believe that savings equivalent to 2.1 years’ worth of personal income would be enough for retirement. This is the lowest expectation in Asia compared with the regional average of 12 years,” Mr. Diokno said.

The BSP chief said it is important that voluntary retirement savings plans such as PERA would supplement state-based pension plans. 

Only 1,586 Filipinos have utilized the facility as of July, with total contributions of P137 million, Mr. Diokno said. Majority or 69% of contributors are locally employed, while 17% are overseas Filipino workers (OFWs) and 14% are self-employed.

“OFWs have higher contributions at P110,000; local employed workers at P82,000; and the self-employed at P76,000. These figures remain regrettably low,” Mr. Diokno said.

A person aged 18 or older can contribute a maximum of P100,000 yearly under the PERA platform, but the amount may reach up to P200,000 for OFWs.

The development and upgrade of the PERA registry system was funded by the Asian Development Bank. Phase 2 of the ADB-funded project covers the development of the Bureau of Internal Revenue’s (BIR) ePERA system, which will facilitate the processing of electronic tax credit certificates and accept reports from PERA administrators. — LWTN

SEC permanently shuts Fast Track

THE Securities and Exchange Commission (SEC) has ordered the permanent shutdown of Fast Track Worldwide, Inc., which it found operating an unauthorized investment scheme.

In an Aug. 20 resolution uploaded on its website, the corporate regulator has denied Fast Track’s motion to lift its cease-and-desist order, and has made such order permanent.

The company was issued the shutdown order in May after it was found to have engaged in offering investment contracts to the public. It filed a motion to lift the order in June.

While it is a registered corporation since February 2019, Fast Track is only authorized to engage in the direct selling of food and merchandise. Its registration specifically prohibits it from soliciting investments from the public.

However, the SEC found that the company is bundling its products with investment contracts. It sells beauty products, health products, clothes, appliances, books, and car care products, but resellers are promised profit through the recruitment of more sellers.

“That they are selling their products is uncontested; what is at issue… (is) the sale of its product was carried out as part of an investment package that guaranteed returns and added bonuses by recruitment of new members,” the SEC said. “This is what converted the activity into a sale of securities in the form of investment contracts.”

Such activity requires authorization from the SEC by obtaining a secondary license to sell securities. Fast Track did not have this authorization.

The SEC also said Fast Track was engaged in pyramiding, as its clients pay money to the company, receive the right to sell the products, get compensated for the recruitment of more members, and such compensation has nothing to do with the sale of the products.

With the resolution, Fast Track must permanently stop its operations, and will be prohibited from transacting any business involving funds in its depository banks.

The SEC has shut down at least five other companies this year for the sale of securities without a license. These are: JOCALS688 Beauty and Wellness Products Trading, Inc.; Building Our Success Stories Network, Inc.; CROWD1 Asia Pacific, Inc.; Lion City Finance Group, Inc.; and Payasian Pte. Ltd. Corp. — Denise A. Valdez

Masters and maps

MASTERS and maps are all the rage this season for Leon Gallery’s Magnificent September Auction, happening live at 2 p.m. on Sept. 19 at the gallery’s salesrooms in Legazpi Village.

The word “Magnificent” isn’t an exaggeration in this case. Dominating the lots is Jose Joya’s “Angeles,” with an initial bid of the princely sum of P10 million (plus a buyer’s premium of 15%). The catalog says, “Angeles is a stunning work that captures the master in the pinnacle of his artistic practice.” The piece (Lot 156) comes with certification from Alexander Richard Joya Baldovino, a member of the artist’s family.

As for the maps, a prized possession-to-be would be the Ramusio-Gastaldi Map of 1563 (initial bid of P2 million), an antique map that calls this group of islands “Filipina” for the first time in a European document (Lot 96). Another document, the “Historia de la Provincia de Philipinas,” an early history of the colony up to 1716, is also up for grabs for the same price (Lot 98). Another historically important item will also be up on the block: a gold neck ornament from the 10th-13th century, a pre-Hispanic artifact, has an initial bid of P3 million (Lot 110). Meanwhile, Juan Luna’s “View of Mariquina” circa 1895 (Lot 116), is also in the catalog, and has an initial price of P2.4 million. Antiques are also up for sale: a chair from the collection of artist Felix Resureccion Hidalgo (Lot 113) has an initial price of P120,000; and a grand matrimonial Ah Tay bed (Lot 115) has a tag of P1.4 million.

Several other items pass the million mark (or even the five million mark). Lee Aguinaldo’s “Linear 98 and 99” (signed and dated 1969), depicting what appear to be windows, have an initial price of P4.2 million each (Lots 41 and 42). Ang Kiukok’s “Mother and Child,” signed and dated 1968 and accompanied by a certificate, is tagged at P6 million (Lot 46). Fernando Zobel’s elegant interpretation of “Seville” (Lot 74), meanwhile, is up for auction with an initial price of P5 million, and an Amorsolo half-nude, “The Offering,” signed, dated, and with a certificate, is also on the block at the initial price of P5.5 million (Lot 126). Other prominent items that pass the million mark and more are works by Mark Justiniani, Jose John Santos, Jigger Cruz, H.R Ocampo, Malang Santos, and Anita Magsaysay-Ho. More works by National Artists Jose Joya, Amorsolo, Vicente Manansala, Benedicto “BenCab” Cabrera, and Arturo Luz round out the catalog.

The catalog can be viewed in full at leon-gallery.com/auctions/. Absentee bids are accepted for auction day on the 19th; the works can be viewed by appointment from Sept. 12 to 18, Saturday to Friday at Leon Gallery, G/F Eurovilla I, Legazpi corner Rufino Streets, Legazpi Village, Makati. Log on to www.leon-gallery.com for more information. —  JLG

Home-based lifestyle drives shift in consumption — Nielsen

PHILIPPINE consumption of fast-moving consumer goods has shifted to suit a home-based lifestyle, a report from Nielsen Holdings PLC said.

“‘Do-it-yourself’ (DIY) behaviors and demand for in-home branded experiences have persisted even beyond living restrictions and store re-openings in many Southeast Asian markets,” the data measurement firm said in a press release on Tuesday.

Around a quarter or 24% of Philippine consumers switched to pack sizes, which Nielsen said suggests that they are seeking goods that suit a homebound lifestyle.

Southeast Asian consumers are also buying more food and dairy, including those in the Philippines with an 11.4% increase.

“Companies have the opportunity to seize that interest and respond with affordable, accessible and branded take-home experiences,” Nielsen Intelligence Unit Head Scott McKenzie said.

In the report COVID-19 Behavioral Reset, Nielsen said interest in DIY activities has remained, even though global restrictions are starting to be lifted.

“Global measures confirm that many homebound routines are here to stay, and this facet of consumer reset is transforming behaviors in a big way,” the report said.

Consumers whose incomes declined due to the pandemic have been cost-saving and avoiding exposure to the virus by fulfilling their needs through key consumer goods.

For those whose incomes did not change, staying at home has allowed for more “creative exploration” as they try new products.

Nielsen said that the news cycle on the transmission of COVID-19 no longer influences the market for fast-moving consumer goods (FMCG) in Southeast Asia. Instead, socio-economic and behavioral patterns are influencing the industry.

Consumers, Nielsen said, will reprioritize what they will buy, with declines in alcohol, healthcare, personal care, and beverages.

“Stockpiling behavior hasn’t persisted to the extent of March and April, reflecting the lack of correlation we had previously seen between news stories on the rates of virus transmission and FMCG sales spikes,” it said.

Nielsen said that buyers are also turning to consumer goods to fill gaps in entertainment and travel experiences. Consumers are also looking for more affordable goods, prioritizing products that have quality and value.

More than half of constrained spenders, or those whose incomes fell due to COVID-19, started shopping at a new store during the time they were surveyed in May. In contrast, 33% of spenders whose incomes did not change did the same.

The main reasons constrained spenders shift stores were the number of sales promotions, the closure of the old stores, and a lack of stocks.

Among constrained spenders who are working from home, 44% added DIY activities to their routine, while 33% of insulated spenders did the same. — Jenina P. Ibañez

Fractional ownership investments lure scores of art world investors in pandemic

NEW offerings kept coming over the summer: Banksy, George Condo, Zao Wou-Ki.

A New York startup that allows investors to buy a tiny stake in paintings by world-class artists for just $20 has seen a surge in demand during the pandemic, according to its founder, and has bought 15 artworks since the onset of COVID-19 to feed their appetite. A recent $1.52 million initial public offering of a piece by the American graffiti artist KAWS sold out in a few hours.

“People feel that equity markets are overvalued and they are looking for other places to put money,” said Scott Lynn, a collector who started the company, Masterworks, in 2017.

Masterworks is at the forefront of a burgeoning niche in fractional ownership in luxury assets such as fine art, collectibles, vintage cars and even race horses such as Authentic, the winner of the Kentucky Derby Saturday. The startups offer the shares as an affordable way to invest in expensive, rarefied fields that are typically available only to the mega-rich.

Think of it as the art market’s version of the popular trading platform Robinhood Markets, which lets users buy a fraction of a company’s share for a few dollars. It mirrors the democratization movement unfolding in the stock market — except that the assets are inherently riskier and lacking of a track record. Auctions are filled with casualties, and even works by star artists can implode once prices get overheated.

The concept of fractional ownership isn’t new in the art market — or for thoroughbreds. It’s a buyer-beware investment: Robinhood itself is under pressure after complaints from novice investors and is facing a US regulatory probe. But the pandemic has heightened the taste for those risky bets. It’s about the experience and the excitement of owning a part of something unique — even as many will likely take a loss.

“Folks are stuck in the house, bored, and, if they’re lucky enough to be working, aren’t spending money on things they normally would,” said David Ritter, an analyst with Bloomberg Intelligence. “So, they have money to play with.”

James Scollick, 40, an avid user of Robinhood from Los Angeles, discovered Masterworks on Instagram in July and invested $10,000 two weeks later. Half of that went into buying shares of a Condo painting and the rest into secondary-market shares for Banksy’s Mona Lisa.

“It felt like a natural way to invest some of my money,” he said.

Masterworks has been luring about 10,000 new users a month during the pandemic, founder Mr. Lynn said, and it isn’t alone. Acquicent, a company founded last year to develop a trading platform for fractional-share owners of classic cars, saw an 80% jump in the number of potential investors in the past three months, according to Anthony Citrano, founder and chief executive officer.

“It’s an asset class that 99.9% of people could not touch ordinarily,” he said. “As far as people interested in investing, it’s very hot right now.”

At MyRacehorse, the number of investors has tripled since April, according to founder Michael Behrens. More than 12,000 investors watched a race at Santa Anita Park in California on Zoom recently, some wearing #myracehorsewins T-shirts and hats. In June, the two-year-old company bought a 12.5% stake in Authentic, a colt trained by twice-Triple Crown winner Bob Baffert, in a deal that valued the racehorse at $15 million.

“You have to go into it understanding that it’s not a traditional investment,” Behrens said. “We encourage people to embrace the experiential part of it.”

Otis, a one-year-old firm offering emerging art and collectibles such as sneakers and comic books, is also seeing an increase in demand. Of the 35 pieces it owns, 20 were purchased since March, according to founder Michael Karnjanaprakorn. Shares go for as low as $10. The most expensive offering was a $425,000 painting by Banksy.

“Maybe two years ago this seemed like a very stupid idea,” Karnjanaprakorn said. “People were like, ‘Why would you do that?’ Now it’s a real thing.”

The fractional-ownership companies have different business models, but most file documents with the US Securities and Exchange Commission and host initial public offerings similar to new equity issues. At Masterworks, there’s a secondary exchange market for those interested in quicker returns by trading shares.

In recent months, Masterworks has emerged as an active buyer of works under $5 million even as deals in the broader art market slowed down. The startup acquired 15 artworks for $31.8 million since March 17, compared with five in the previous two years, according to founder Lynn, who added he plans to spend more than $100 million on art this year.

Masterworks buys at auctions or through private sales, planning to hold onto the works for as many as seven years. The company charges a 1.5% annual management fee and takes 20% of the profit when the pieces eventually sell. To keep up with demand, Lynn more than doubled his staff to 40 people since March.

User Aaron Shumaker, 37, has spent more than $200,000 on shares of six artworks at Masterworks in the past year, including by Andy Warhol, Jean-Michel Basquiat, and Yayoi Kusama.

“I don’t think I’d feel so comfortable to have one of these works displayed on my wall,” said the Washington, D.C.-based entrepreneur, who hasn’t laid eyes on any of his holdings. “That seems like a lot of risk.”

Instead, he’s happy for Masterworks to store them in a facility with proper security, climate control, and insurance, while he hopes to make a financial return on his investment.

The sobering reality is that most art doesn’t go up in value.

“Even great, great artists become overvalued to the rest of the market,” said Jeffrey Deitch, who co-founded an art-advisory service for Citibank in 1979 and has championed street art as a gallery owner and museum director. “There were times when I bought works of art, when I was convinced it would be a great score, and I barely got out alive.” — Bloomberg

Vista Land & Lifescapes to launch new residential projects before yearend

VISTA LAND & Lifescapes, Inc. (VLL) continues to eye more residential projects to be launched in the second half of 2020 after a subdued performance in the first half due to the coronavirus disease 2019 (COVID-19) pandemic.

In a statement on Tuesday, the Villar-led property developer said it had been recording 70% of its pre-COVID sales as of June, and its performance in the two months that followed had continued to improve.

“[I]f this sales trajectory continues, we might decide to launch more projects in the fourth quarter. We do not need to acquire new land anyway as we have an existing land bank of about 3,000 hectares,” VLL President and CEO Manuel Paolo A. Villar said in the statement.

The company noted that despite the impact of the pandemic to its first semester performance — where VLL posted a 40% income cut to P3.4 billion — its residential and leasing segments had recovered.

In particular, there has been a growing interest for residential projects in locations outside Metro Manila since the pandemic happened.

“We have witnessed that shift of customer preference to house and lot products in the provincial areas as evidenced by the increase in proportionate sales coming from our housing products outside Mega Manila compared to the same period last year,” VLL Chairman Manuel B. Villar, Jr. said in the statement.

The leasing segment has also been steadily growing, with 79% of VLL’s gross floor area having restarted operations after being limited to 20% at the height of the lockdown.

“The 21% that remain closed are those tenants that are still not allowed to operate as per government mandated restrictions,” the company chairman said.

VLL’s portfolio is composed of horizontal, vertical and commercial segments. It owns companies such as Brittany Corp., Crown Asia Properties, Inc., Vista Residences, Inc., and Camella Homes, Inc.

“This pandemic may have upended the real estate industry and the economy in general yet a lot of opportunities are still there… Right now, we are making the necessary adjustments to our business operations in order to better position the company once the economy fully recovers,” Mr. Villar said.

Shares in VLL at the stock exchange gained 11 centavos or 3.49% to close at P3.26 each on Tuesday. — Denise A. Valdez

Trump ended 2018 France trip having art loaded on Air Force One

AFTER Donald Trump’s planned trip to a French cemetery for fallen Marines was canceled in November 2018, the US leader had some extra time on his hands in a mansion filled with artwork. The next day, he went art shopping — or the presidential equivalent.

Trump fancied several of the pieces in the US ambassador’s historic residence in Paris, where he was staying, and on a whim had them removed and loaded onto Air Force One, according to people familiar with the matter. The works — a portrait, a bust, and a set of silver figurines — were brought back to the White House.

The decision to cancel Trump’s visit to the Aisne-Marne American Cemetery outside Paris is under new scrutiny after the Atlantic magazine last Thursday published a bombshell report that Trump belittled the American servicemen buried there, part of a broader history of disparaging certain people who’ve served in the military. Trump has vehemently denied making the comments about “suckers” and “losers” in the armed forces.

Never previously reported is Trump’s spur-of-the-moment art caper before leaving the ambassador’s residence.

The incident was met with a mixture of amusement and astonishment at the time, but caused headaches for White House and State Department staffers, according to several people familiar with the episode who asked not to be identified due to its sensitivity.

CHIC MANSION
The story unfolded like this: While in Paris with other world leaders to commemorate the centennial of the end of World War I, Trump stayed at the official residence of US Ambassador Jamie McCourt, the palatial Hôtel de Pontalba. The mansion, in Paris’s chic 8th arrondissement, dates to 1842. It has served as a flagship of the State Department’s “Art in Embassies” cultural diplomacy program, and is open to tours.

The president’s planned visit to the Belleau Wood cemetery was canceled when rainy weather grounded the presidential helicopter, according to a redacted e-mail the White House released to rebut the Atlantic story. The US Secret Service ruled out a motorcade for the 56-mile drive, according to two people familiar with the matter.

That left Trump with about six hours of free time in the ambassador’s residence.

The next day, Trump pointed out a Benjamin Franklin bust, a Franklin portrait, and a set of figurines of Greek mythical characters, and insisted the pieces come back with him to Washington.

THE PEOPLE’S HOUSE
McCourt, the ambassador, was startled, but didn’t object, according to people briefed on the incident. Trump later quipped that the envoy would get the art back “in six years,” when his potential second term in office would be winding down.

The art, worth about $750,000 according to one of the people familiar with the episode, was loaded aboard Air Force One while Trump visited another cemetery before the flight back to Washington.

“The President brought these beautiful, historical pieces, which belong to the American people, back to the United States to be prominently displayed in the People’s House,” White House spokesman Judd Deere said in response to questions from Bloomberg News.

Trump’s move prompted some hair-pulling and a furious exchange of e-mails back home between the State Department’s Bureau of Overseas Buildings Operations and White House officials who organized the art transfer. Ultimately, because the art is US government property, the move was deemed legal.

PURCHASE POLICY
Trump, who once used his charity to purchase a large portrait of himself, is known to display in his private West Wing dining room mementos from various official trips and encounters. Over time that’s included a pair of shoes gifted by musician Kanye West and an Ultimate Fighting Championship belt.

A senior White House official said presidents are permitted to display personal gifts from Americans or heads of state while they’re in office, but must purchase them if they want to keep the presents after they depart.

The figurines that caught Trump’s eye found a new home on the fireplace mantel in the Oval Office. Depicting Greek gods, they date to the early 20th century and were made by Neapolitan artist Luigi Avolio, who was trying to pass them off as sculptures from the 16th or 17th centuries, according to London-based art dealer Patricia Wengraf.

PORTRAIT GALLERY
In an Antiques Roadshow moment, Wengraf described the figurines as “20th century fakes of wannabe 17th century sculptures,” and of little value.

The French art-collection episode comes with a curious footnote. After White House art curators examined the pieces Trump brought home, the president was told that the Franklin bust was a replica. He joked that he liked the fake better than the original, two people familiar with the episode said.

The Franklin portrait snagged from Paris was also a copy — of the one Joseph Siffred Duplessis painted in France in 1785, which was then held by the National Portrait Gallery a mile from the White House.

The curators removed a different portrait of the founding father from the Oval Office and borrowed the original Duplessis from the gallery. That one now hangs in the Oval, not the replica Trump ferried out of France. — Bloomberg

NGCP accelerates automation of grid system

THE country’s privately led grid operator has stepped up the modernization of the power transmission system by deploying more drones and other unmanned equipment.

The National Grid Corporation of the Philippines (NGCP) continues to upgrade the facilities it inherited from the government since 2009, despite quarantine restrictions mounted against the global coronavirus pandemic.

Since it started using drone technology to inspect transmission lines in 2019, it now has three helicopters equipped with high-definition cameras with gimbal stabilizers, infrared scanning, and UV detection equipment.

These are crucial for its assessment of the condition of power lines and facilities, especially those that are inaccessible due to the terrain and environmental restrictions, it said in a statement on Tuesday.

Moreover, the technology also hastens its stringing activities in a day, company representatives said during a virtual briefing on the same day.

Usually, connecting tower segments manually takes a half-day, while using drones can connect three to four segments within the same period.

The transmission company is procuring 45 more drone equipment to be rolled out over the coming years, NGCP said.

Moreover, it is set to launch a central control and monitoring system to remotely operate substations. It will have real-time monitoring software and hardware to be used for the acquisition, collection, monitoring, and analysis of power data and equipment condition.

Also, it has refurbished its high voltage direct current (HVDC) buildings in Ormoc, Leyte and Naga, Camarines Sur, which connects the Luzon and Visayas grids.

“We are also equipping our personnel with the necessary skills and tools to efficiently use and operate these new technologies to provide the country with quality, reliable, and sustainable power transmission services,” NGCP said.

In May, NGCP said several ongoing projects had been delayed since the lockdown started in mid-March. It said the delays could lead to automatic or manual “load dropping”  — or rotational power interruptions — as energy demand is picking up.

Still, the company said it could guarantee the “readiness of our transmission facilities to deliver available power to where it is needed.” — Adam J. Ang

COVID-detecting helmets to be distributed locally

A SMART helmet designed to detect a coronavirus symptom will soon be available in the Philippines, its Chinese maker said.

China-based technology company KC Wearable said it had partnered with My Solid Technologies & Devices Corp. and Medcare Supplies to distribute its KC N901 Smart Helmet in the Philippines for the first time.

The smart helmet allows its wearer to rapidly screen multiple individuals for high temperatures. It can screen up to 200 people a minute with 96% accuracy, KC Wearable said in an e-mailed statement on Tuesday.

A high temperature is one of the key symptoms of the coronavirus disease 2019 (COVID-19).

“The Philippines has one of the highest infection rates in South East Asia, with more than 200,000 cases confirmed so far. As new cases continue to emerge, interest in the wearable thermal detection device has grown,” the Chinese firm said.

“Powered by sophisticated augmented reality technology, the helmet visor’s thermo-scan sensors show the temperature of people in real time. The helmet is effective within a seven-meter radius, enabling the wearer to maintain social distancing at all time, and has the potential to link up to other data on COVID-19 tracking apps. The device stores all data itself with a 64 gigabyte internal memory,” it explained.

My Solid Technologies & Devices, one of the local distributors, is part of the listed holding firm Solid Group Inc., which is engaged in distribution, real estate, and support services, among others.

“The helmet’s flexibility across a number of sectors including health and security services makes it a natural choice in the fight against COVID-19. By distributing the product, we hope to make an important contribution to our country’s efforts to control the virus,” My Solid Technologies & Devices President Beda T. Mañalac was quoted as saying in the statement.

KC Wearable Global Head Jie Guo said: “We have already partnered with countries in Europe, Asia, Africa and South America and seen positive results. So, we are pleased that we will now be working with our distributors in the Philippines to do what we can to bring some relief and reassurance to the country’s citizens.”

The Chinese firm said the smart helmet is currently being used in Indonesia, the United Arab Emirates, Italy, the Netherlands, Kuwait, Chile, Turkey, and some African countries.

“KC Wearable has partnered with national authorities and major transport hubs such as airports, as well as schools and hospitals, to detect COVID-19 symptoms in a range of settings,” it added. — Arjay L. Balinbin

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