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BoC finds some undervalued rice shipments

By Beatrice M. Laforga, Reporter

SEVERAL TRADERS have undervalued rice shipments with provisional goods declaration, resulting in P1.4 billion in lost revenues, the Bureau of Customs (BoC) said.

A Finance department statement quoted Customs Commissioner Rey Leonardo B. Guerrero as saying they found the valuation of rice shipments with provisional goods declaration were “quite low compared with the prevailing market prices.”

“But those are subject to post-modification and post-audit. And in the meantime, we are still conducting the post-modification and verifying the payments of rice because some of them are clearly undervalued. So we will catch up in the post modification and post-audit,” Mr. Guerrero was quoted as saying during an Executive Committee meeting at the DoF.

The Bureau of Customs (BoC) accepts a provisional goods declaration if the private traders do not have regulatory permit, clearance or license present during the lodgement. The provisional declaration can be accepted if the duty and tax treatment of the goods would not be different from goods with complete declaration. The rules were outlined under Customs Memorandum Order (CMO) 07-2020 issued in March this year.

The widespread undervaluation of rice imports appear to have been substantiated after BoC concluded an audit of rice traders. Out of the 245 traders that imported rice from March 5 to June 20, 2019, the BoC audited 60 entities with the most number of incidents and highest percentage discrepancies between their declared transaction values and the published reference rates.

Vincent Philip C. Maronilla, Customs assistant commissioner heading the Post Clearance Audit Group, told BusinessWorld the audited rice importers were found to have owed the government more than P1.417 billion in deficiencies of customs duties, penalties, surcharges, and interest.

“In terms of level of compliance, the audit findings show a low level of compliance among the audited importers, as 47 out of 55 auditees, or 85.45%, were found to have committed violations of Customs laws and regulations in more than one of the issues discussed in the preceding section, and only 8 auditees were found to be compliant with their obligation to ensure the truthfulness and accuracy of the goods declaration,” Mr. Maronilla, who is also the agency’s spokesperson, said in a Viber message Tuesday.

The BoC launched the inquiry in August 2019 after the Federation of Free Farmers (FFF) warned the government may not meet its target collections since imported rice were being undervalued by traders to evade tariffs.

“The audit of import transactions, resolution of undervaluation cases, and actual collection of the correct tariffs, is long overdue. We reported this to DoF last August 2019 and followed it up again this year when we saw that the degree of undervaluation appeared to have worsened,” FFF National Manager Raul Q. Montemayor said in a Viber message Tuesday.

Data on the volume of rice imports that had been subjected to audit was not available as of press time.

“There were also imports from India and Pakistan were assessed the ASEAN rate of 35% tariff instead of 50%; there is no need to investigate this and BoC should have immediately collected the tariff differential. Part of the problem also arises from the wrong tariff code classification of various types of imports which we thought BoC would immediately address but which we can see from their weekly price memoranda they have not done so yet up to this time,” he added.

The rate of tariffs slapped on imported rice was increased to 35% of the declared value under Republic Act 11203 or the Rice Tariffication Law after the quantitative restrictions were lifted.

Rice tariff collections hit P11.036 billion in the seven months to July, up 4% from a year ago and higher than the BoC’s annual P10 billion target for the Rice Competitiveness Enhancement Fund (RCEF). RCEF supports farm mechanization and other measures to allow farmers to better compete against imports.

Jewels keep their luster amid coronavirus pandemic

By Joseph L. Garcia, Reporter

BOREALIS CRYSTALS continues to make money from jewelry sales amid a coronavirus pandemic, though it had been difficult to sustain operations due to supply and manpower constraints during the lockdown.

“We still made a profit in August, but it went down by quite a lot,” owner Czarielle Formalejo said in an e-mail.

“Gold sells far better than silver for us,” she said. “Customers don’t usually tell us that they’re purchasing our items as investments. Often they tell us that these will be heirloom pieces to be kept for sentimental purposes.”

BW Bullseye 2020-focusA pandemic that threatens health and lives urges people to pat their own thinning pockets, and wonder if their old adornments can help build a bridge to the new normal.

While most countries have abandoned the use of the gold standard after World War II, gold continues to capture the world’s markets and imagination.

“Gold has been a reliable store of value for thousands of years and since ancient civilizations,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in an e-mailed reply to questions.

Gold is more tangible and has an underlying value, unlike currency notes that are certificates of indebtedness of governments, he added.

“There is also a cultural aspect in the use of gold and the demand for it,” Mr. Ricafort said. “Some societies use gold as gifts, such as in India especially during weddings, making it a major global market for gold.”

World gold prices rose to a record $2,075 per ounce on Aug. 7, or up by about 28% since the year started, Mr. Ricafort said.

This as bond yields in the US and other developed countries fell to new lows of close to 0% or even negative in other countries, narrowing gold’s disadvantage as an investment that does not have interest rate returns unlike bonds and other fixed-income instruments, he added.

Gold prices have gone up by more than 80% in the past five years, he pointed out.

“Gold is considered a real asset and no one’s liability, said Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines. “Gold can be buried underground for years and never lose its value.”

GOLD ONLINE
“If you were lucky enough to buy gold in 2016 when the price was at an all time 10-year low of $1,050 per troy oz, you would have indeed made a sound investment,” Josef Sagemuller, a jewelry specialist at Salcedo Auctions, said in an e-mail.

More Filipinos have been investing in gold and jewelry during the pandemic, with online jewelry stores springing on Facebook, according to Jean Henri Lhuillier, president of Cebuana Lhuillier Pawnshop and the Chamber of Pawnbrokers of the Philippines, Inc.

Foreclosed jewelry pieces at pawnshops have also become popular targets of entrepreneurs who eventually sell these on Facebook Live, he said in a statement on Sept. 7.

“Based on the actual inventory of Cebuana Lhuillier’s foreclosed jewelry, the number of Filipinos who have been buying these items is growing,” Mr. Lhuillier said. “In fact, even during the quarantine period, the number of buyers significantly increased.”

He said more people are now seeing the value of jewelry and gold especially during the crisis. “You would be surprised by the types of jewelry being pawned off. Some are even heirloom pieces and sold at very good prices.”

Speaking of crisis, the sale of the Romanov collection — one of the world’s largest jewel collections from Russia’s last ruling dynasty — remains to be one of the best-documented cases of the role gems play in a crisis.

“Gems lost their magic and were prized solely for their monetary value,” according to the book The Flight of the Romanovs: A Family Saga by John Curtis Perry and Constantine Pleshakov. “Now, only the prosaic matter of survival counted: medicines, bribes for border guards, or daily bread,” according to the book about the survivors of the Bolshevik purge of their former ruling dynasty.

“Another advantage of jewelry investment during the crisis is that these are not as regulated as the flow of currencies that move from one bank or country to another,” Mr. Ricafort said. “However, jewelry, especially those involving huge amounts and physically larger may be regulated by Customs authorities at various ports of entry.”

Such was the case with the cache of Imelda R. Marcos, whose 60-piece jewels Greek national and Marcos crony Demetriou Roumeliotes had tried to smuggle out of the Philippines in 1986, when the late dictator Ferdinand E. Marcos was ousted by a popular uprising.

The Customs bureau seized the jewels from Mr. Roumeliotes at the Manila International Airport as he was about to leave the country. The Presidential Commission on Good Government (PCGG) has been trying to sell the jewels for years.

JEWELS AND DESIRES
One of the pieces left behind by Mrs. Marcos was also left behind by the Romanovs — a pearl and diamond tiara made in 1841 for Empress Alexandra Feodorovna (born Charlotte of Prussia), the wife of Czar Nicholas I.

“The tiara was seized in Malacañan Palace together with other jewelry items, on or shortly after Feb. 25, 1986 and transferred to the Bangko Sentral ng Pilipinas on March 1, 1986,” according to the PCGG. “It is part of the Malacañang Collection.”

Jewelry is usually evaluated in terms of the quality of the stones used, the purity of the gold and the craftsmanship, Mr. Sagemuller said. “Jewelry hardly ever depreciates in value but you have to be aware of what it is you are buying, and do your research.”

“When you choose to invest in quality stones and pieces, you will be able to hedge your savings and money from inflation, hyperinflation and economic crises,” he added.

It’s not enough that a piece of jewelry bears the name of the world’s most famous brands. “Cartier, Bulgari, Tiffany and the other jewelers are good investments because they usually keep their value over time,” Mr. Sagemuller said.

“However, the more common pieces that are mass produced will not appreciate as much as their haute joaillerie or high-end jewelry counterparts. Always buy stones of high quality in as big a size as you can afford,” he added.

Part of the attractiveness of jewelry as investments is in the meaning we give them. The Dowager Empress of Russia refused to sell her jewels because they served as a tangible link to her life before being forced into exile.

“The attractiveness of gold transcends many things,” Mr. Asuncion said. “Gold and the love for it may also be equated with greed, and sometimes, too much greed.”

Ms. Formalejo, mentioned at the outset, said emotions play an integral role in jewelry purchases. “Being a luxury item, it’s not a usual, everyday purchase so there’s a lot of thought that comes into it as well.”

Aja Raden, designer and author of Stoned: Jewelry, Obsession, and How Desire Shapes the World said of jewelry: “They’re not objects that can kill, or objects that can cure, or build, or even think. Jewels have one, and only one, real power: They reflect our desires back to us and show us who we are.”

Wilcon’s new stores make up for ‘lost time’

By Denise A. Valdez, Senior Reporter

WILCON DEPOT, Inc. is targeting to open two more stores by the end of the year to catch up on delayed construction from the two months of strict lockdown due to the coronavirus pandemic.

In a media briefing late Monday, Wilcon President and CEO Lorraine Belo-Cincochan said the company is looking to have a total of 63 stores by end-2020, down from its original target of opening 65 new stores.

“Our target has been revised to 63 this year because as we all know, the lockdown made everybody stop doing anything, especially construction… We are now at 61 stores… And we still plan to open two more by the end of this year, the last quarter of the year,” she said.

In the past months, Wilcon has already opened four new stores, and come next year, will open nine more stores to make up for “lost time” during the strict lockdown.

The island of Luzon was put under tight quarantine measures from mid-March to mid-May due to the rapid spread of coronavirus cases. While parts of the country remain under a relaxed quarantine to date, Wilcon has reopened its store network since May.

The company noted it saw pent-up demand coming in since it resumed operations, mostly for “soft goods” or products that do not require construction work.

“What happened was people locked up in their homes really saw all four corners of their houses and rooms… When we opened in May, they were coming in to Wilcon and replacing all the bulbs. Because we use the aircon, the electric fan, and everything more often, the tendency is there will be more wear and tear,” Ms. Belo-Cincochan said.

The work-from-home set-up is likewise pushing people to buy more furniture that would suit new household needs.

Because of this, the company is able to post an “encouraging” financial performance in the third quarter, said Rosemarie Bosch Ong, Wilcon chief operating officer.

“We’re still hopeful that (September) will give us better results, better than our August definitely. If you sum it up,… we can see some good numbers for the third quarter,” she said.

Wilcon’s earnings dropped 65% to P352.36 million in the first half of 2020. Its net sales declined 23% to P9.04 billion due to store closures during the strict lockdown.

Shares in Wilcon at the stock exchange grew 10 centavos or 0.65% to P15.60 each on Tuesday.

Aboitiz holding firm eyes up to P10-B bonds 

ABOITIZ EQUITY VENTURES, Inc. (AEV) is looking to issue up to P10-billion fixed-rate retail bonds in the fourth quarter of the year.

In a disclosure to the exchange on Tuesday, AEV said it has applied for authorization from the Securities and Exchange Commission to launch the second tranche of its P30-billion bond program

The program was registered in June last year, from which P5-billion bonds were already issued and listed within the same month.

For the second tranche, AEV wants to issue a primary offering of up to P5-billion bonds, which will have an oversubscription option of up to P5 billion.

The target is to do the offering within the fourth quarter, but may be later depending on market conditions.

Proceeds from the planned issuance will be used to partially refinance the company’s maturing loans.

AEV has tapped BDO Capital & Investment Corp. and First Metro Investment Corp. as joint issue managers, and with BPI Capital Corp., China Bank Capital Corp. and SB Capital Investment Corp., as joint lead underwriters for the offering. BDO Unibank, Inc. – Trust and Investments Group will be the trustee.

Similar to last year’s P5-billion first tranche bonds, the second tranche bonds will be listed at the Philippine Dealing and Exchange Corp. (PDEx).

AEV currently has seven bond listings at PDEx as of Sept. 18, two of which are scheduled to mature within the year: P10.46-billion bonds on Nov. 6 and P6.2 billion bonds on Nov. 21.

The company posted a 55% earnings decline to P4 billion in the six months ending June. Its power business, which contributes the majority of AEV’s income, dropped 57% to P2.9 billion.

Shares in AEV at the stock exchange shed 85 centavos or 1.80% to close at P46.50 each on Tuesday. — Denise A. Valdez

SC tells GMA to reinstate workers

By Vann Marlo M. Villegas, Reporter

THE Supreme Court ordered GMA Network, Inc. to reinstate 30 cameramen and assistant cameramen who were illegally dismissed in 2013.

In a statement, the SC’s public information office said the court’s third division on July 13 declared the petitioners as regular employees of GMA. It ordered the network to pay their back wages, allowances, and other benefits from the time of their dismissal up to their reinstatement.

GMA is also directed to pay each of the petitioners’ attorney’s fee equivalent to 10% of the total monetary award and the amount will have legal interest of 6% per year to be computed from the finality of the decision until full payment.

The court said there is an employer-employee relationship between the network and the camera operators who were hired between 2005 and 2011 and were all dismissed in May 2013.

It said that to be considered as independent contractors and not employees as claimed by the network, it must be proven that the petitioners were hired “because of their unique skills and talents and that GMA did not exercise control over the means and methods of their work.”

“In this case, GMA provided the equipment used during tapings and assigned supervisors to monitor the petitioners’ performance and guarantee their compliance with company protocols and standards,” the statement read.

“The Court also gave weight to petitioners’ arguments that they were regular employees having performed functions that were necessary and desirable to GMA’s usual business as a television and broadcasting company,” it said.

Only casual employees whose work is “neither necessary nor desirable to the usual business and trade” of the employer are required to render one year of service to become regular employees while those whose work is necessary attain regular status “from the time of engagement.”

There was also no showing that employees who were paid P750 to P1,500 per taping were hired because of their skills “not possessed by ordinary employees,” it said.

The court ruled that the work of the petitioners are “within the regular and usual business of GMA,” adding that “it would be absurd to consider the nature of the petitioners’ work of operating cameras as distinct or separate from the business of GMA, a broadcasting company that produces, records, and airs television programs.”

As regular employees with the right to security of tenure, they may only be terminated for “just or authorized cause, and after due notice and hearing.”

“As illegally dismissed employees, petitioners are entitled to reinstatement to their petitions with full backwages computed from the time of dismissal up to the time of actual reinstatement,” it said.

The court remanded the case to the labor arbiter to compute the backwages and other monetary awards.

A copy of the decision has yet to be posted.

GMA said it has yet to receive a copy of the decision.

Green groups seek halt of DMCI’s coal-fired power generator project

By Adam J. Ang

A GROUP of petitioners asked a Palawan court to stop the planned construction of a coal-fired power plant by the power arm of DMCI Holdings, Inc.

Environmental groups and some community leaders in Narra town, which were assisted by the Environmental Legal Assistance Center, filed with the Regional Trial Court in Puerto Princesa on Tuesday a complaint against DMCI Power Corp. for its pipeline 15-megawatt (MW) power plant project.

They are asking the court to issue an environmental protection order that will compel the company to stop pursuing its project. They also seek to cancel the implementation of its environmental compliance certificate (ECC) granted by the Department of Natural Resources and Environment-Environmental Management Bureau (DENR-EMB) in the Calabarzon region.

“The battle of Palaweños against coal has already been a long one, and we can neither afford nor intend to lose it. Letting coal in would cost the welfare of our people and of Palawan’s rich biodiversity,” Grizelda Mayo-Anda, the petitioners’ legal counsel, said in a virtual briefing.

The said order will also mandate the Palawan Council for Sustainable Development to review the strategic environmental plan clearance, which it issued to the power firm in 2015, as well as to prevent various local government agencies, including the Narra mayor’s office, from awarding other permits for the project.

The company secured an ECC for the project last year. It was also considered as an energy project of national significance by the Department of Energy (DoE). The coal-run generator was first opposed in 2012.

The petitioners also wanted the court to issue a writ of continuing mandamus, which will require the EMB to revisit and review DMCI Power’s ECC application, noting the company’s failure to conduct public hearings on the project and to provide clear impact projections, among others. 

“Nakita natin ang maraming pagkukulang sa pagsusuri nila (DENR) ng ECC application ng DMCI Power (The DENR’s evaluation of the ECC application of DMCI Power was not substantial),” Ms. Anda said.

DMCI Power is operating four existing diesel and bunker fuel-fired power plants across Palawan. It has three other power generators in Masbate, Oriental Mindoro, and Sultan Kudarat.

The publication reached out to the company for comments, but it has yet to respond as of press time.

One of the petitioners, Cynthia S. Del Rosario of Palawan Alliance for Clean Energy, said the province has “more than enough” of power capacity, which stands at 57 MW, to meet its present demand around 50 MW.

“Sa option na kung kailangan mag-entertain ng bagong service contracts, dapat renewable energy na, (In entertaining new service contracts, they must be renewable energy projects)” she added.

Sustainability think-tank Center for Energy, Ecology, and Development (CEED), another petitioner, feared that if the project will go online, it will raise power rates paid for by consumers. It cited the previous P9.38 per kilowatt-hour generation tariff in the supply contract between DMCI Power and the Palawan Electric Cooperative.

“There is no reason why Palaweños must be made to suffer exorbitant rates when renewable energy sources capable of providing cheap and clean electricity abound in our country,” Avril De Torres, the group’s research head, said.

In the first half of 2020, DMCI Power chipped in P256 million in income share to parent DMCI Holdings, Inc., a 10% increase from last year, attributed to higher energy sales in Palawan and lower fuel costs.

Shares in DMCI inched up 0.25% to close at P4.04 each on Tuesday.

Travel firms study ties with S. Korean counterparts

TRAVEL agencies are looking to develop an exclusive partnership with their counterparts in South Korea in preparation for the resumption of operations.

The Philippine Travel Agencies Association (PTAA) in a press release on Tuesday said that it might negotiate an agreement with the Korean Association of Travel Agencies, where each party will provide a list of members they exclusively work with.

PTAA also hopes that the agreement would help standardize tour costs, create a recommended list of destinations, and set up a complaints committee.

“We would highly appreciate the drafting and signing of a memorandum of understanding wherein both sides will commit to only dealing with accredited travel agencies and tour operators that are members of both our associations,” PTAA President Ritchie Tuaño said.

If signed, the potential agreement would be PTAA’s first same-level international partnership.

“Two-way tourism between our two countries have been growing over the past 10 years.  We want that growth trajectory to continue long term,” Mr. Tuaño said.

Tourist traffic between the two countries is high, with South Koreans leading tourist arrivals to the Philippines for the tenth year in a row last year with 1.99 million tourists.

Filipino tourism was South Korea’s eight largest market last year, with 503,867 arrivals.

PTAA is also asking South Korea for 100% visa-free entry for Filipinos.

The country earlier this year suspended some visa-waiver programs due to the pandemic, halting visa-free entry of Filipinos to Jeju island.

The Embassy of the Republic of Korea resumed short-term visa processing to Filipino business travelers and spouses of Korean citizens last July.

The tourism sector is one of the worst-hit industries during the pandemic, with revenue dropping 72% to P81 billion as of July 2020, the Tourism department said last month.

Last year, tourism contributed 12.7% to the country’s gross domestic product and employed 5.7 million people. — Jenina P. Ibañez

I-Remit forms unit to expand into trading, e-commerce

REMITTANCE service provider I-Remit, Inc. is setting up a subsidiary to expand into retail, wholesale trading, and e-commerce.

In a disclosure to the Philippine Stock Exchange on Tuesday, I-Remit said it was seeking the approval of the Securities and Exchange Commission for the incorporation of the unit, which will be called Global Hapimart E-Commerce, Inc.

The subsidiary will provide customers additional financial services for consumer goods, it said.

“Global Hapimart is envisioned to complement the remittance business of, and create opportunities for, I-Remit specifically in retail and wholesale trading and in e-commerce,” the disclosure said.

Global Hapimart will be incorporated with an authorized capital stock of P1 million, of which I-Remit will be subscribing to P600,000 in common shares with the par value of P1.00 per share.

Out of the total subscription, I-Remit is to pay P63,000 with the balance payable upon the call of the Global Hapimart board of directors.

In the minutes of its stockholders’ meeting on July 31, I-Remit said it was planning to continue innovating products amid tightening competition with fintech firms offering accessible and cheaper payment services.

“I-Remit’s Management is closely watching these developments and has already crafted a cutting-edge strategy,” the company said, adding that the move is being implemented “for the purposes of keeping up with these advances.” 

I-Remit committed to invest in data technology in allowing smooth delivery of services between its mobile and website platforms, it said.

The company recently tapped Ripple for its blockchain technology, a digital data storage, in expanding its global payment services. I-Remit plans to forge more partnerships to further develop the technology.

I-Remit is a non-bank remittance service provider operating in 23 countries worldwide. — Kathryn Kristina T. Jose

Calling BS in a data-driven world

By Patricia B. Mirasol

“The world is awash with bullshit, and we’re drowning in it,” is how Carl Bergstrom and Jevin West open their book,  Calling BS: The Art of Skepticism in a Data-Driven World. Having a good bullshit detector during the COVID-19 pandemic is a matter of life and death, the professors said during a webinar aiming to arm people with the skills to identify and challenge quantitative garbage. The fellow professors also teach a course on the subject at the University of Washington. 

Bullshit—or BS—is defined as language, statistical figures, and other forms of presentations intended to impress or overwhelm the audience, with a blatant disregard for truth and logical coherence. “Calling BS” is an utterance in which one publicly spurns something objectionable.

Mr. West said that while humans are good at spotting BS words, numbers are a lot harder. “They seem precise, objective, and scientific. Some numbers are so great they seem to create divine authority.”

FAULTY QUANTITATIVE DATA
Because the COVID-19 landscape is fraught with gaps in information, it has given rise to organized disinformation campaigns, disingenuous federal messaging, fake studies and astroturfing, dreadful preprints, equally dreadful peer-reviewed work, sloppy reporting, and cherry-picking, the co-authors enumerated.

Disinformation can arise because numbers aren’t presented in a way that allows for meaningful comparisons. One simple way to check is to look at the axes of graphs. Does the dependent variable axis of a bar chart go all the way to zero? It should. Bar graphs emphasize the absolute magnitude of values associated with each category. Line graphs, on the other hand, do not need to include zero, because the emphasis is on the change in the dependent variable (usually the y value) as the independent variable (usually the x value) changes.

Mathiness”—or formulas and expressions that may look and feel like math but disregard the logical coherence and formal rigor of actual math – propagates BS. Few people understand advanced mathematics, so the use of equations is often wrongly equated with rigor.

Selection bias is another element that contributes to disinformation. Selection bias is an error with the methodologies behind recruiting and retaining participants in studies, or analyzing the data obtained. It makes the results a less reliable reflection of the target population. 

EXAMPLES OF INACCURACY
During the webinar, the professors shared examples of how BS proliferates. When the Centers for Disease Control and Prevention released guidance stating that a period of beyond three months is necessary for reinfection to be possible among COVID-19 survivors, news outlets reported those three months as the maximum time period COVID-19 survivors were protected from reinfection. According to Mr. Bergstrom, these news outlets confused necessity and sufficiency. He advised tracking the information back to the original source—in this case, the CDC—to verify reported claims.

Screenshot via the UW iSchool / YouTube


Another instance mentioned in the discussion was the skepticism surrounding climate change being the cause of the wildfires in the US. “If the fires in Oregon and Washington are ‘climate change,’ then why do the fires stop at the Canadian border?,” asked one. Several professors explained that while the wildfires affecting the US do not stop at the border, they do stop being tracked by US data at that point.

CLEANING UP THE INFORMATION ENVIRONMENT
People don’t need to have technical expertise, nor know how an algorithm works, to call out problems with data. A Ph.D. is not a requirement to find the truth, said Mr. Bergstrom. “You can spot bullshit by looking carefully at what goes in and what comes out,” he said. Ask: are the numbers or results too good or too dramatic to be true? Is the claim comparing like with like? Is it confirming a personal bias? 

Mr. Bergstrom advised seeking out multiple sources to get the entire picture. “Always triangulate,” he said. “Ask: ‘Who’s telling me this? How do they know this? What are they selling?’” 

Calling BS isn’t about showing how smart you are, said Mr. West. It’s about making the community smarter. “Do it in a way that’s right and concise. Do it in a way that doesn’t attack character.”

Uy’s gaming firm gets SEC nod for P1.13-billion follow-on offering

PH RESORTS GROUP HOLDINGS, Inc., the gaming and hospitality firm of businessman Dennis A. Uy, has gained regulatory approval to do a follow-on offering of P1.125-billion common shares.

In a statement on Tuesday, PH Resorts said it was given the pre-effective approval by the Securities and Exchange Commission to generate funds through the offering of shares to the public.

The company said in a disclosure in June that its intends to offer up to 450 million common shares.

Proceeds from the follow-on offering will support the company’s resort project in Mactan, Cebu, the Emerald Bay casino and hotel, which it targets to partially open next year.

“This is another milestone on the way to completing Emerald Bay and continuing on our journey to further put the Philippines on the regional and international gaming map,” Mr. Uy, chairman of PH Resorts, said in the statement.

The company has tapped Unicapital, Inc. and Abacus Capital and Investment Corp. as lead and co-lead underwriters for the offering, respectively.

Emerald Bay is PH Resorts’ flagship project, which will have a total of 146 gaming tables, 729 electronic gaming machines, 780 hotel room bays and five villas.

The project will have two phases, with the first phase—involving 122 gaming tables, 600 electronic gaming machines and 270 hotel room bays—scheduled to open by the second quarter of 2022. The company’s goal, however, is to do a soft opening by the end of 2021.

“Despite the ongoing COVID-19 (coronavirus disease 2019) pandemic, we are confident that the Philippine tourism and gaming industry will be on the road to recovery when Emerald Bay opens,” Mr. Uy said.

However, because of the impact of the COVID-19 pandemic to the tourism sector, Equity Trader Aniceto K. Pangan from Diversified Securities, Inc. said prospects for PH Resorts’ follow-on offering may be dim.

“With the current situation of the spread of the virus at its high, the prospects for tourism, as well as gaming sectors, will continue to be negative at this stage. Thus, any follow-on offering will not be attractive for investors, especially with this pandemic crisis,” he said in a text message.

Tourist destinations such as resorts are required to remain under limited operations while under the lightest form of lockdown, or the modified general community quarantine.

PH Resorts booked an attributable net loss of P277.07 million in the first semester, widening from P169.15 million a year ago, due to the temporary closure of its Panglao resort triggered by the coronavirus pandemic.

Shares in the company closed at P2.19 apiece on Tuesday, up three centavos or 1.39% from the last session. — Denise A. Valdez

Treasury rejects all tenders for 10-year bonds as yields go up

THE GOVERNMENT rejected all bids for its offer of reissued 10-year Treasury bonds (T-bonds) on Tuesday as investors sought higher yields amid expectations the central bank will keep rates steady in the near term.

The Bureau of the Treasury (BTr) did not award any 10-year T-bonds on Tuesday even as tenders reached P44.507 billion, more than the P30 billion on the auction block. This, as the bonds fetched an average rate of 3.329%, up 60.5 basis points (bps) from the 2.724% quoted for the tenor at the Aug. 12 auction, where it made a full P30-billion award of its offer of the reissued papers.

At the secondary market on Tuesday, the 10-year bonds fetched a rate of 3.093%.

National Treasurer Rosalia V. de Leon said investors asked for higher yields on the long tenor as the Bangko Sentral ng Pilipinas (BSP) is seen keeping benchmark rates steady.

“Investors’ appetite remains on [the] immediate part of [the] curve. They see policy rates will remain steady for [the] rest of [the] year,” Ms. De Leon told reporters via Viber after the auction.

The central bank may maintain the low interest rate environment in the next two years to provide support to the economy amid uncertainty caused by the coronavirus disease 2019 (COVID-19) pandemic, BSP Governor Benjamin E. Diokno said on Monday.

“Given that there’s a lot of uncertainty still in the air, we are committed to a long-term low inflation regime…. To me, that is what we intend to do. What we have done will be on the table for the next, maybe, another two years,” Mr. Diokno said in an interview with ANC News Channel when asked about the country’s interest rate environment by 2023 after the Federal Reserve’s recent signal that US interest rates should be kept at near-zero for at least three years.

Rates on the BSP’s overnight reverse repurchase, lending, and deposit facilities are at record lows of 2.25%, 2.75%, and 1.75% after the central bank slashed rates by a total of 175 basis points this year.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said yields on the 10-year bonds rose as investors expect inflation to accelerate.

“The BTr opted to reject the 10-year auction with the market asking for higher yields to compensate for a possible pickup in inflation in September and October,” Mr. Mapa said in an e-mail.

Inflation eased to a three-month low of 2.4% in August, slower than 2.7% in July 2020, but faster than the 1.7% in August 2019.

This brought the year-to-date average to 2.5%, within the BSP’s 2-4% target band and slower than the 2.6% forecast for 2020.

The Treasury is looking to raise P160 billion from the domestic market this month: P100 billion via weekly auctions of Treasury bills and P60 billion via T-bonds to be offered fortnightly.

The government is looking to borrow around P3 trillion this year from local and foreign lenders to help fund its budget deficit expected to hit 9.6% of the country’s gross domestic product. — K.K.T. Jose

The pros and cons of a virtual art fair

No traffic or parking issues, but difficult backend operations

ART IN THE PARK, held annually on a summer Sunday at the Jaime Velasquez Park in Salcedo Village, Makati, had to take a new route by going virtual this year because of the coronavirus disease 2019  (COVID-19) pandemic. The fair — known for its relatively affordable pieces with a P50,000 ceiling — was first postponed then held over a whole week in August online via the website www.artinthepark.ph. Despite the limitations of the virtual sphere, 2,600 works from over 50 galleries went up for sale and display. The fair also boasted special online exhibits by Richard Quebral, Dex Fernandez, and with a collaboration with Globe and BPI, exhibits by Robert Alejandro, Reena Gabriel, Jackie Lozano, and dance group Fifth Wall Fest.

The fair donates a portion of all sales to the Museum Foundation for its projects and programs with the National Museum of the Philippines and its network.

“To our pleasant surprise, we logged the same number of visitors on our opening day as we would average for the fair’s physical edition,” Art in the Park co-founder Trickie Lopa told BusinessWorld in an e-mail.

Assessing the staging the virtual art fair, Ms. Lopa noted that “We had to request galleries to replenish the number of pieces available on their shopfronts,” a sign that sales were good. Asked what they learned from the experience, notably the difference between setting up an art fair live versus one online, Ms. Lopa quipped, “The backend operations are definitely more difficult and time-consuming!”

For her part, Art in the Park co-founder Lisa Periquet said, “The transition to online was not as simple as we thought it would be. The digital space brought its own set of operational and logistical issues so it felt like we were creating a completely new type of fair. But of course the spirit of the Art in the Park we all love — its accessibility, variety, and easygoing nature — was always the inspiration. Going online is definitely an option we would consider again in the future, if a physical event is still not viable.”

The new format did have some advantages: connoisseurs and customers didn’t have to worry about the tedium of traffic, parking, and everything else that comes with being outdoors. “Some of our visitors have told us that they enjoyed taking their time purviewing the pieces online over eight days, so that’s a plus for the online event,” said Ms. Lopa. “There is room in a post-COVID world for both physical and online events.”

She added, however, that “Nothing will replace seeing and experiencing art in the flesh, exchanging insights with artists and fellow art lovers.”

Art Fair Philippines, another event staged by Ms. Lopa, Ms. Periquet,and their partner Geraldine Araneta), has attracted thousands of people to the Link carpark in Makati since 2013 — the most recent one was held in the penultimate week of February. Asked about plans for Art Fair Philippines for 2021, Ms. Lopa said, “Those are still under discussion.” — Joseph L. Garcia