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House panel OK’s tax perks for SMC airport

By Arjay L. Balinbin, Senior Reporter

THE House ways and means committee on Wednesday approved a proposal to exempt a San Miguel Corp. (SMC) subsidiary from all taxes while it is constructing the P740-billion international airport in Bulacan province.

The tax exemption is included in the substitute version of House Bill No. 7241 which seeks to grant San Miguel Aerocity, Inc. a 50-year franchise to build, develop, establish, operate, and maintain an airport in Bulakan town.

“During the 10-year construction period, the grantee shall be exempt from any and all direct and indirect taxes and fees of any kind, nature or description, which emanates exclusively from the construction, development, establishment, and operation of the airport and the airport city,” according to a copy of the substitute bill.

The SMC unit will be exempted from income, value-added, percentage, excise, and documentary stamp taxes, customs duties and tariffs, taxes on real estate, buildings and personal property, business and franchise, and supervision fees.

At the end of the construction period, San Miguel Aerocity will remain exempt from income tax and taxes on real estate, buildings and property for the remainder of its franchise, according to the bill. The tax exemptions will expire “as soon as it is determined by a competent authority that the grantee has fully recovered its investment cost” on the airport project.

In a phone message to BusinessWorld, Finance Assistant Secretary Maria Teresa S. Habitan said the department is “not okay” with the proposed grant of tax incentives.

“The Bulacan Airport was an unsolicited bid. Under the BoT (build-operate--transfer) law, the government must not provide subsidies or guarantees to proponents. We take that to mean including tax perks,” Ms. Habitan said.

House ways and means committee Chairman Albay Rep. Jose Maria Clemente S. Salceda said the panel had tempered the tax incentives to be granted to SMC’s unit under the substitute bill.

“On its own, the project was already going to be beneficial, as a P740-billion infrastructure investment that will come entirely out of the private sector’s hands, Mr. Salceda said at the hearing. “That’s 4% of GDP (gross domestic product). In return, we are being asked to provide some tax concessions. By tempering the tax provisions, we made sure that the Filipino people will get even more economic benefits for less taxpayer cost,” he added.

“Gusto kong matuloy ang project na ito (I want this project to push through). But we need stronger guarantees of returns for the public,” he said, noting that the airport project “will make a lot of money.”

The House panel also agreed the SMC subsidiary will be entitled to generate income from the Airport City, after a competent authority has determined that it has fully recovered its investment cost, equivalent to a project internal rate of return (IRR) of 12% per annum. But for IRR in excess of 12%, 100% of the income will be remitted to the National Government.

“There will be hotels and restaurants in the surrounding Airport City, so we want to make sure that the franchise’s tax privileges only extend to the airport operations,” Mr. Salceda said of the project, which will cover 2,500 hectares and accommodate 100 million passengers annually.

Bureau of Internal Revenue Assistant Commissioner Manuel V. Mapoy said during the hearing the tax incentives “should be limited only to the airport construction and not the airport city.”

“If this project fails, baka delikado ang financial system natin. I don’t see from the records how many passengers will pass through Bulacan. I don’t see where we’re going guaranteeing and granting a 50-year franchise,” Aklan Rep. Teodorico T. Haresco, Jr. said at the hearing.

ACT-Teachers party-list Rep. France L. Castro added: “Talong-talo ang mga mamamayan dito dahil sa 5-10 years na tax exemption (Citizens will lose big because of the five to 10 years of tax exemption).”

Gabriela Rep. Arlene D. Brosas also raised concerns about the farmers and residents who will be displaced by the construction of the airport, but SMC Holdings Operations head Edgar L. Dona said the company has programs for affected residents.

SMC and the Transportation department signed the concession agreement for the airport in September 2019. Under the deal, San Miguel will build, operate and maintain the New Manila International Airport for 50 years. The project includes the construction of an 8.4-kilometer toll road, which will link the gateway to the North Luzon Expressway. — with a report from Beatrice M. Laforga

2020 targets for BIR, BoC slashed anew

The Customs bureau is tasked to generate P506.15 billion in revenues this year. — PHILIPPINE STAR/EDD GUMBAN

THIS YEAR’S collection targets of the government’s main revenue-generating agencies have been slashed once again, as economic activity remains sluggish due to the pandemic.

Based on the latest Budget of Expenditures and Sources of Financing, the Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC) now aim to collect a combined P2.192 trillion this year. This is a fifth lower than the P2.8 trillion the two agencies collected in 2019.

The BIR’s target was lowered by 3% to P1.686 trillion, from the  P1.744 trillion goal revised last May. The BoC’s collection target is now at P506.15 billion, down 6.6% from the previous goal of P542 billion.

For 2021, the BIR and BoC’s combined collection goal was hiked to P2.52 trillion, up by 15% from this year’s target.

The BIR aims to generate P1.904 trillion, while the BoC is expected to collect 25% or P619.5 billion. Compared with their targets this year, these are higher by 12.9% for the BIR and 22.4% for the BoC.

Other tax-collecting offices were tasked to generate P17.8 billion next year.

“Where tax revenue collections are dwindling — and when government spending is most critically needed — government has to resort to deficit spending,” President Rodrigo R. Duterte  said in his 2021 budget message published on Wednesday.

The revenues collected will support the state’s P4.5-trillion spending plan next year.

Mr. Duterte said the implementation of the tax measures under the Comprehensive Tax Reform Program (CTRP) will “continue to strengthen” the tax base and support higher collections.

He said the Tax Reform for Acceleration and Inclusion Act (TRAIN) is expected to generate P133.9 billion in additional revenues next year, while the second package or the Corporate Recovery and Tax Incentives for Enterprises pending in Congress could contribute P26.1 billion.

However, with the expected P97.2-billion reduction in revenues when the corporate income tax is lowered to 25% from 30% now, Mr. Duterte said the estimated tax receipts from the CTRP will be reduced to P62.7 billion next year.

The President ordered the economic team to fast-track the digitalization of the government’s financial management operations such as developing digital taxation, establishing related infrastructure and the use of technology in collecting taxes and releasing funds.

“With this at hand, we expect to limit the need for physical tax payment transactions at the BIR, thereby reducing unnecessary exposure to COVID-19 infections, but more importantly, promoting contactless and less corruption- prone transactions,” he added.

For 2022, the BIR and BoC collection targets were at P2.84 trillion, broken down into P2.178 trillion for the BIR and P663.1 billion for the BoC.

They are expected to account for 76% and 23% of the P2.86-trillion total tax revenues that year, respectively.

As of July, taxes collected by the BIR fell by 10.53% from a year ago to P1.115 trillion, while Customs collections also went down by 15.3% to P303 billion

Economic managers expect the economy to shrink by 4.5-6.6% this year before bouncing back to 6.5-7.5% growth next year. —  B.M.Laforga

Central bank flags potential systemic risks from global recession

By Luz Wendy T. Noble, Reporter

THE central bank vowed to ensure financial stability in the market, as it raised the possibility that “systemic risks may materialize” due to the global recession.

“Systemic risks may seem like a high-level concept but it really just means that financial authorities are looking for any sign that the operations of the financial market may be impaired to the detriment of the general public,” BSP Governor Benjamin E. Diokno said in a statement after a  meeting with the Financial Stability Policy Committee (FSPC).

Systemic risk is the potential for an event at the company level to trigger severe instability or the collapse of an entire industry or economy.

“Pursuing financial stability requires us to manage systemic risks and we do this because our primary goal is to protect the welfare of the public,” he said.

Pressed for details, Mr. Diokno said the FSPC is looking into many factors to gauge the possibility of systemic risks.

“For example, was the economy weak or strong at the start of the pandemic? What’s the country’s debt-to-GDP ratio? How strong or weak the banking system [is] before the pandemic and so on. As you can see, no two countries are alike,” Mr. Diokno said in a text message.

In July, Mr. Diokno said they had yet to see any indications that the financial market had been impaired as a result of the pandemic.

In a bid to manage financial stability, the FSPC said ensuring liquidity will be critical to recovery and the transition to a new economy.

“Among the steps that the FSPC is considering is a new instrument that will allow banks to mobilize the liquidity already with them by taking a view on future GDP (gross domestic product) growth,” the BSP said.

It said boosting risk assessment practices for bank credit “is continuously aligned with spot yields in the securities market.”

Most lenders implemented more stringent lending standards for both enterprises and households due to reduced tolerance for risk as the pandemic raged, a BSP study showed. The same trend was seen during the global financial crisis.

Risk management systems imposed by regulators are vital to guard against systemic risks that may materialize, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“If banks have huge losses from loan defaults, that could threaten their capital. Large market losses is also a risk to bank’s capital, that is why regulators have placed limits on trading activities,” he said in a text message.

Impaired and impacted banks may in turn be unable to act as financial intermediaries which are much needed at a time of crisis, said ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa.

“More businesses will close, incomes will drop further, loan payments will freeze and banks will get hit again and so on and so forth,” Mr. Mapa said in an e-mail.

Mr. Ricafort said banks have been required by BSP to have a business continuity plan to ensure continued operation even in the face of extreme situations such as calamities and the current pandemic.

Gross nonperforming loans (NPL) or credit unsettled at least 30 years past due date surged 26.7% to P273.6 billion in June from P215.9 billion a year ago. This, as the industry’s total credit portfolio dipped 1.27% to P10.82 trillion from P10.96 trillion in June last year.

With this, the banking industry’s gross NPL ratio stood at 2.53% from 2.43% in May.

The BSP expects NPL to reach around 4.6% by end-December 2020 due to the pandemic. This is much lower than the 17.6% peak in 2002 at the aftermath of the Asian financial crisis.

“If banks come under fire due to souring loans, it may drag the economy further into recession and government will need to step in to save the system from imploding,” Mr. Mapa said.

Amid the rise in bad loans, lenders have beefed up provisions for credit losses by 48.5% year on year to P300.3 billion in June.

Banks’ capital adequacy ratio stood at 12.73% as of end-June, well beyond the 10% minimum required by the BSP.

Amid the possibility that such systemic risks can materialize, Mr. Mapa said the government has the responsibility to address the main problem.

“[The] government needs to do all it can to nip the risk in the bud by addressing the root cause of the systemic risk, which is the drop in income and loss of jobs caused by the pandemic. Prevention always trumps the cure and the government may end up spending more if it waits for these systemic risks to materialize,” Mr. Mapa said.

8990 eyes up to P9-B bond offer

MASS HOUSING developer 8990 Holdings, Inc. is planning an issuance of up to P9-billion fixed rate notes to refinance existing bonds maturing by the end of the year.

In a disclosure to the exchange on Wednesday, 8990 said its board of directors has approved offering peso-denominated notes with a base size of up to P5 billion and an oversubscription option of up to P4 billion.

The plan is to sell the notes only to qualified institutional buyers, which means it would not require registration with the Securities and Exchange Commission.

“The fixed rate notes are intended to pay off our 5-year bonds due in October,” 8990 Investor Relations Officer Patricia Victoria G. Ilagan said in a text message to BusinessWorld.

8990 has tapped BDO Capital & Investment Corp. as the sole issue manager, lead arranger and sole bookrunner, and RCBC Capital Corp. as co-arranger for the planned offering.

“The final terms of the notes will be determined after the bookbuild process and prior to the issuance thereof. The company shall provide the necessary updates regarding this in due course,” it said.

The notes will be listed at the Philippine Dealing & Exchange Corp. (PDEx).

8990 currently has three securities listed at PDEx: the P8.41-billion bonds maturing in October, P375.5-million bonds maturing in July 2022, and P218.91-million bonds maturing in July 2025.

In the first half of the year, 8990 recorded a 47% drop in attributable net income to P1.48 billion, as its revenues fell 30% to P4.91 billion. In a regulatory filing, it said the decline was due to the lockdown to contain the coronavirus pandemic, which hampered its business operations and sales especially in the second quarter. — Denise A. Valdez

SMIC cuts size of first tranche of debt issuance to about P10 billion

SM Investments Corp. (SMIC) is reducing the size of its planned bond offering to up to P10 billion from the original P15 billion.

In an Aug. 25 letter to the exchange, the Sy-led conglomerate said it had amended its prospectus for the planned initial offering of its proposed P30-billion debt securities program.

The base issue size for the first tranche has been trimmed to P5 billion from P10 billion, while the oversubscription option will remain at P5 billion. The bonds will have a tenor of three years and six months.

To recall, SMIC applied for the shelf registration of a three-year P30-billion bond program with the Securities and Exchange Commission in mid-July. In the prospectus, the company indicated an initial bond issuance amounting to P10 billion with an oversubscription option of up to P5 billion.

SMIC said then that the initial tranche was given a PRS Aaa credit rating by local debt watcher Philippine Ratings Services Corp. (PhilRatings). PRS Aaa is the top credit rating given by PhilRatings, which means the obligation has minimal credit risk and the issuing company has an “extremely strong” capacity to fulfill its financial commitment.

“Further details on the offer will be made available to the public once finalized,” SMIC said.

The company also listed P5.6-billion bonds at the Philippine Dealing and Exchange Corp. in July, its fifth listed securities based on records from the fixed-income exchange.

SMIC’s earnings dropped 69% to P7.09 billion in the first half of the year, as its revenues declined 21% to P185.53 billion due to the impact of the coronavirus pandemic to its malls and banking businesses.

Shares in the company at the stock exchange gained P6 or 0.68% to close at P887 each on Wednesday. — Denise A. Valdez

Tax court maintains decision ordering BIR to pay back Consunji energy unit

A COURT upheld its decision to order the Bureau of Internal Revenue (BIR) to pay back P27.34 million to Semirara Mining and Power Corp. (SMPC), while it denied the petition of the bureau’s commissioner for a review of the order.

SMPC told the stock exchange on Wednesday that it received a copy of the Court of Tax Appeal (CTA) en banc’s decision to deny due to lack of merit the BIR commissioner’s petition for a review of its previous order to refund the power company.

The issue stemmed from SMPC’s payment under protest of the said amount in value-added tax (VAT) and excise tax for its first partial shipment of imported diesoline in 2013.

The company was supposed to be exempted from paying duties for its importation of 36 million liters of diesoline under Presidential Decree (PD) No. 972 or the Coal Development Act. The Department of Energy (DoE) certified its tax exemption.

In that year, the Consunji-led company sought the help of the Regional Trial Court (RTC) in Makati City to prevent the BIR and the Bureau of Customs (BoC) from imposing an advance payment of VAT on its importation of diesel fuel for its own use and consumption under Revenue Regulations No. 2-2012.

The power firm asserted its right for a refund while under said regulation, as it is also exempted from paying VAT under its coal contract and the PD 972.

“SMPC contested the application of said regulation as it effectively diminishes its exemption granted by law and impairs the rights under its COC (Coal Operating Contract) pursuant to the non-impairment clause of the constitution,” it said.

In November 2013, the RTC issued a preliminary injunction against the BIR, BoC, and the Department of Finance (DoF) regarding the regulation. The parties filed motions for reconsideration but were denied in February of the following year.

The regional court then declared inapplicable the said revenue regulation in SMPC’s importation of petroleum products for being tax-exempt.

As the BIR denied its claim for a tax refund, SMPC on Sept. 2, 2015, brought its case to the CTA. Three years later, the court ordered the BIR commissioner to pay back the amount to the company.

Shares in SMPC went down 1.6% to close at P9.25 each on Wednesday. — Adam J. Ang

A chef has recreated Chandler’s grilled cheese in Friends — and it’s great

By Kate Krader

THE year 2020 was supposed to be a big one for fans who had reached capacity on reruns of the hit show Friends.

A much-hyped live reunion was slated for March as a drum roll to help launch HBO Max. The coronavirus shut down that party. The show was rescheduled for the end of summer, but that’s been pushed back, too. “The cast of Friends will be there for you … eventually,” reported Variety.

The show’s popularity has stayed strong since it went off the air in 2004: In 2018, Netflix spent $100 million to keep running episodes through 2019. Fans watched 54.3 million hours of the show that year, making it one of the top two on Netflix, according to Neilsen ratings.

Now a book is here for those desperate to restart their relationship with Monica, Rachel, Joey, Ross, et al. Friends: The Official Cookbook, by Amanda Yee (Insight Editions; $30; Sept. 20) contains 70-plus recipes and a ton of nostalgic pictures. The recipes are based on references from episodes over the course of the show’s 10 seasons. There are such cult favorites as Phoebe’s grandmother’s cookies, as well as random ones such as the G. Stephanopoulos Pizza (based on an erroneous pie delivery) and Wedding Pigs in a Blanket.

As far as pop culture cookbooks go, this one’s an outlier. The results are surprisingly solid, created by a professional chef, not Monica (actress Courtney Cox), who plays one on TV. Author Yee, a big fan of Friends, started the restaurant Blues Woman in Copenhagen and cooks with James Beard-nominated chef Bryant Terry; the two are collaborating on the book Black Food, scheduled for 2021. “My hope is that people will be able to slow down and continue to nurture new and old relationships through the sharing of a meal,” she says about the Friends cookbook and the memories it inspires.

Yee’s recipe for a bang-up grilled cheese includes an Emmy-worthy tomato jam, something you can use to pump up a multitude of dishes, including turkey burgers and cheese plates.

Friends fans will know the grilled cheese backstory from the first season. Chandler hates Thanksgiving because it’s the day his parents told him they were getting divorced, so he prepares a “traditional holiday feast”: grilled cheese, tomato soup, and the fake onion ring Funyons. Yee hacks the meal by turning the soup into a sweet, spiced jam that’s spread on the bread; the Funyons are reconfigured as caramelized onions that are stuffed into the sandwich before it’s skillet-grilled. The choice of cheese is up to the reader.

The result is a crispy, melty sandwich studded with sweet onions, and a tomato puree that hints at ketchup. But it still evokes Chandler and Friends: “Cut the sandwiches into squares, diagonals, or whatever shape the pilgrims didn’t use,” is the recipe’s final direction.

It’s a smart, fun trick. Even as a die-hard classicist on the grilled cheese front, I will make this version again — probably before the Friends reunion finally comes to pass.

The following recipe is adapted from Friends: The Official Cookbook by Amanda Yee.

Tester’s notes: You can use a store-bought tomato jam, but this one is simple, plus this is cherry tomato season. And unless you insist on American cheese in your grilled cheese, a stronger-flavored one such as sharp Cheddar or pepper Jack will work best with the sweet jam.

CHANDLER’S GRILLED CHEESE

WITH TOMATO JAM

Makes 4 sandwiches

Tomato Jam

1 tbsp. ground cumin

1 lb. cherry tomatoes

1/2 tsp. grated fresh ginger

Zest and juice of 1/2 lemon

1/2 cup brown sugar

1/2 cup water

1/2 medium onion, sliced

1/2 tbsp. vegetable oil

Grilled Cheese

1/2 tbsp. olive oil

1 yellow onion, sliced

Unsalted butter, softened

8 slices sourdough bread

8-12 slices cheese of your choice

Make the tomato jam: In a medium heavy pot, combine all the ingredients over high heat. Let the mixture come to a boil, stirring occasionally, then reduce the heat to low. Simmer until the jam thickens, about one hour. Let cool completely, then transfer to the refrigerator for at least three hours, or overnight.

Make the grilled cheese: Heat and add the oil. Add the onion slices and cook over moderate heat, stirring occasionally, until soft and golden, about 10 minutes. Transfer to a bowl. Wipe off the pan with a paper towel.

Butter one side of each slice of bread. Flip the slices so they are all butter-side down on the work surface. Smear a generous layer of tomato jam on half of the bread slices, and top with one to two tablespoons of caramelized onions. On the other bread slices, place two to three slices of cheese.

Set the pan over moderate heat. Working in batches, take the bread slices with the cheese and place butter-side down in the pan and toast for about three minutes, until the cheese is melted and the bread is browned. Set the toasts cheese-side down on the caramelized onion slices. Transfer the whole sandwich back to the pan, un-toasted side down, and cook for two to three minutes, until brown. Give the sandwich a firm pat with the spatula, to make sure the cheese is sticking to the onions, and remove from heat. Repeat with remaining sandwiches.  — Bloomberg

Manila Water subsidiary closes drinking water division

THE PURIFIED drinking water business unit of Manila Water Total Solutions Corp. (MWTS), a subsidiary of Manila Water Co., Inc., will be permanently closed on Oct. 31.

In a stock exchange disclosure on Wednesday, Ayala-led Manila Water said MWTS’ Healthy Family Business Division will close due to recurring losses and the inability to financially sustain its business operations.

“While the Healthy Family Business Division has in recent years made strong efforts to improve operations and profitability, the ever-increasing competition in the bottled water industry and the recent economic challenges have proved too difficult to cope and keep the business afloat,” Manila Water said.

The Healthy Family brand was launched in 2015 and ventured in the business of providing purified drinking water to customers.

MWTS will continue its operations based on its main purpose of engaging in water, wastewater and environmental services, Manila Water said.

In a separate disclosure, Manila Water said it has received a copy of the decision by the Philippine Competition Commission (PCC) regarding the proposal of Razon-led Trident Water Co. Holdings, Inc. to acquire shares in the company.

The water concessionaire said the PCC decided that the proposed acquisition of Trident Water will not result in the ‘substantial lessening’ of competition.

“The Commission resolved to take no further action with respect to the proposed transaction between Trident Water and Manila Water,” the disclosure said.

On Tuesday, PCC approved the move of Trident Water to acquire 51% voting interest in Manila Water.

Trident Water, a subsidiary of Prime Metroline Infrastructure Holdings, Inc., will secure the controlling stake after a subscription of 820 million common shares from the unissued capital stock of Manila Water.

On Wednesday, shares of Manila Water at the stock exchange rose 6.66% or P0.88 to close at P14.10 per share. — Revin Mikhael D. Ochave

Apple defeats Epic’s effort to restore Fortnite on App Store

APPLE, INC. was spared from having to immediately reinstate Epic Games, Inc.’s Fortnite on its App Store, an early court victory for the iPhone maker in an intensifying battle over the tolls charged to app makers.

But US District Judge Yvonne Gonzalez Rogers’s ruling late Monday wasn’t a total loss for Epic, as she granted the company’s request for a temporary order blocking Apple from limiting the game developer’s ability to provide Unreal Engine, key graphics technology, for other apps.

The mixed ruling comes as Apple faces a backlash from some app developers who say its standard App Store fee of 30% and others policies are unfair and designed to benefit the iPhone maker’s own services. The fight blew up Aug. 13 when Epic told customers it would begin offering a discounted direct purchase plan for items in Fortnite, and Apple then removed the game app, cutting off access for more than a billion iPhone and iPad customers.

Apple said the judge’s ruling recognizes that Epic’s problem is “entirely self-inflicted.”

“Our very first priority is making sure App Store users have a great experience in a safe and trusted environment, including iPhone users who play Fortnite and who are looking forward to the game’s next season,” the company said in a statement. “We agree with Judge Gonzalez-Rogers that ‘the sensible way to proceed’ is for Epic to comply with the App Store guidelines and continue to operate while the case proceeds.”

Epic didn’t respond to a request for comment.

Ms. Rogers said at a hearing Monday that the case isn’t a “slam dunk” for either side and cautioned that her temporary restraining order won’t dictate the final outcome of the litigation. She set a Sept. 28 hearing on Epic’s request for a preliminary injunction.

Epic breached its agreements with Apple by trying to make money on Fortnite purchases while accessing Apple’s platform for free, but didn’t breach any contracts related to Unreal Engine and developer tools, Ms. Rogers ruled.

By limiting Unreal Engine, “Apple has chosen to act severely,” hurting third-party developers who use Epic’s technology platform, Ms. Rogers said.

“Epic Games and Apple are at liberty to litigate against each other, but their dispute should not create havoc to bystanders,” she wrote.

Epic’s Unreal Engine is a suite of software used by developers to build 3-D games and other products. Cutting off Epic from Apple’s iOS and Mac developer tools would mean the gaming company can no longer distribute Unreal Engine to other developers, Epic said on Sunday in a legal filing. Microsoft Corp., which makes the Xbox, uses the technology for games developed for consoles, PCs and mobile devices, and is backing Epic in court.

Apple has said that Epic Chief Executive Officer Tim Sweeney sought a “side” deal seeking an exclusive storefront for Fortnite, a move that Apple executives argued would fundamentally upend how the App Store works. Mr. Sweeney maintains he wasn’t asking for special treatment but for Apple to make the same option available to all developers.

Of the 2.2 million apps available on the App Store, the 30% fee is billed to more than 350,000. Apple reduces the fee to 15% after a consumer uses a subscription for more than a year.

The case is Epic Games, Inc. v. Apple, Inc., 20-cv-05640, US District Court, Northern District of California (Oakland). — Bloomberg

Social media, insulated bags, and seeking help

Seasoned online food entrepreneurs give advice on how to move online

WITH more people spending time at home, many have parlayed both their time and ability into cooking -— and some of them have even translated that into a new career. San Miguel’s Home Foodie held a webinar last week with two seasoned online food entrepreneurs to help budding businesses get up on their feet.

Joseph John Viel (otherwise known as JJ) is known as a chef for the former Cucina Rusticana. His restaurant closed prior to the pandemic, but even before quarantine had been imposed he had already shifted to online food deliveries, as well as having food kiosks and joining Sunday bazaars. “I decided to pour my whole attention to the home-based business instead,” he said, after the quarantines affected the later businesses. “It started after I was done with my restaurant,” he said about his online business, Commissario by Chef Joseph Viel. After he had closed, a lot of his old customers asked if they could still buy food from him.

Another webinar speaker, Dave Cervantes, had worked in several restaurants and kitchens, and had his own online business, Tickle Tongue Pastries. Busy with his career, Tickle Tongue went into a bit of a hiatus, but after the pandemic struck, he decided to resurrect the online pastry shop with a new name, 22 Grams Patisserie.

While Mr. Cervantes is known for his cookies (especially one made with bananas and chocolate), Mr. Viel is known for his traditional Italian dishes, an influence from his Italian heritage. On his menu are Osso Buco, Chicken Parmigiana, a Cerveza Negra Beef Roast, and for dessert, a Mango Cream Pie.

The pair talked about the shift to online and deliveries: for example, ordering from Mr. Cervantes means setting a preferred date. The products are baked on the dawn of the date provided by the customers to ensure freshness. The system also allows him to only make the exact amount, so little or none of the products are wasted. On consistency, he says “there’s always a recipe that we follow to make it consistent.”

As for Mr. Viel, he changed his menu to make the items more travel-worthy. “Some items I totally removed, because I did not want to compromise the quality at all,” he said. For others, he just changed the packaging to protect the food’s freshness and temperature, but it also helps that he makes sure that the riders he hires for deliveries have insulated boxes to maintain the quality.

Social media has been instrumental to Mr. Viel’s success. “Thanks to social media, between Instagram and Facebook — and for those who may not know, I’m also on TikTok.  It really helped boost the brand. It kind of won the hearts of people.”

“I wouldn’t say sensation,” he replied when he was called a TikTok sensation by a webinar host. “But sure, if you want to call me that.” His TikTok is known for videos with his cat, his fitness journey, and his one-minute recipe videos.

“Do not get discouraged in the beginning,” he said of using social media. “I’ll tell you right now there’s a huge possibility that not many people will really bother to try your product. Keep pushing, keep promoting. The moment you start garnering followers, use the power of testimonials.” Customers usually thank him for their orders, and he asks if he could post compliments by customers on his food. “That’s more or less the way to capture your crowd,” he said, comparing online testimonials to how word-of-mouth reviews used to boost restaurants.

“You want to find a good balance between making a good profit and still catering to those who would still want to spend for your product,” said Mr. Viel, giving advice about starting your own business. “The problem with other online sellers, in my humble opinion, is it tends to be too expensive.” He also says that due to safety concerns, restaurants should prioritize takeouts and cut costs where they can — like for rent.

“Don’t be afraid to seek help,” was Mr. Cervantes’ advice. “Don’t be afraid to start, especially right now… We have to focus on what we do, and if we’re focused, then eventually, we’ll be able to create efficient and effective procedures to start our business.”

To order from Mr. Viel, follow his store on Instagram and Facebook @commissarioph. As for Mr. Cervantes, his cookies and cakes are available on Facebook @22gramspatisserie, and on Instagram @22grams.mnl. — Joseph L. Garcia

San Miguel river dredging resumes

THE P1-BILLION dredging project of San Miguel Corp. (SMC) in the Tullahan-Tinajeros river system has removed 2,150 truckloads of silt and garbage after resuming operations in June.

SMC President and Chief Operating Officer Ramon S. Ang said that around 20,000 cubic meters of silt and garbage had been extracted from the river system as of Aug. 25.

“The company has been removing 600 tons of solid waste on a daily basis that go to disposal sites designated and approved by the Department of Environment and Natural Resources (DENR),” he said.

The dredging project, launched in February this year in partnership with the DENR, is part of SMC’s plan to solve flooding in Bulacan and parts of Central Luzon.

“We’re just starting with phase one of the project, covering a 5.25-kilometer stretch of river system from Navotas to Malabon City. We have a long way to go, but we are fully committed to this long-term project that will benefit so many people and our environment,” Mr. Ang said.

He said the bigger objective of the dredging project is to solve flooding problems in low-lying provinces such as Bulacan, where SMC plans to construct a new international airport. He said the dredging activities in Tullahan-Tinajeros play a major part in the plan.

“The dredging will clean up and deepen the river system, increasing its capacity to handle heavy rains and allowing for floodwaters to flow more freely and drain into Manila Bay,” Mr. Ang said.

He said Tullahan River is a spillway for water flowing from Angat and Ipo dams heading to Manila Bay, thus the need to maintain its depth.

“Based on studies by the Department of Public Works and Highways (DPWH), we will need to deepen the river by five meters. Some parts have gone to as low as one to two meters. The accumulation of silt and trash that has caused this is also the primary reason for the heavy incidence of floods in the low-lying areas beside the river, including Bulacan province,” Mr. Ang said.

Meanwhile, he said the airport project and its flood mitigation component would serve as a long-term solution to the flooding issues affecting Bulacan, amid claims from some sectors that the construction will only worsen the flooding situation.

“It will not make sense for us to build an airport here if we do not address these issues. We will do everything to ensure this huge investment in our country will benefit millions of Filipinos and the country for many generations,” Mr. Ang said. — Revin Mikhael D. Ochave

CloudCfo optimistic on growth despite pandemic

By Arjay L. Balinbin, Senior Reporter

THE RESILIENCE of Philippine startups and small and medium enterprises (SMEs) amid the pandemic crisis is keeping CloudCfo, Inc., an outsourced accounting and finance service provider, optimistic about ending the year with positive growth.

“We have been encouraged by the resilience that so many startups and SMEs have shown here in the Philippines in the face of the pandemic. While many businesses have had to rethink their business models and transition to survival mode during this pandemic, companies are finding ways to adapt and become more flexible,” CloudCfo Founder and Chief Executive Officer Mickael Cardoso Das Neves told BusinessWorld in an e-mail interview on Aug. 24.

“Since March, we have had to revise our budget and targets several times as the entire economy responds and attempts to adapt to the pandemic. We still aim to end the year with double-digit growth versus 2019, yet we will remain cautious until things become a bit more certain,” he added.

CloudCfo currently services over 100 Philippine-based companies. It offers outsourced finance services, including accounting, bookkeeping, tax compliance, financial reporting, payroll, budgeting, financial forecasts, catch-up accounting, strategic financial advisory and virtual CFO services.

Mr. Cardoso said uncertainty is a major challenge for the company this year, but it will continue with its growth plans, including recruiting top talents as they are the main drivers of the service company.

“We must plan for growth well in advance to ensure we have the right team in place to meet anticipated demand,” he added.

SEAF Women’s Opportunity Fund recently invested in CloudCfo as it saw great potential in the company, SEAF Investment Director Rowena Reyes said in a statement.

“SEAF’s partnership with CloudCfo will support the development of its proprietary technology and the expansion of its presence in the Philippines to accommodate its growing work force,” she added.

CloudCfo said it plans to use the investment “to grow faster across three key business areas: investment in technology, further development of their in-house expertise and staff as well as the expansion of its services within the market.”

Mr. Cardoso noted the pandemic has shown the benefits of technology for accounting.

“In the midst of alternative working arrangements and internal restructurings, businesses have been leveraging cloud accounting solutions to minimize disruption and maintain oversight and management across their accounting, finance and compliance functions. We expect this trend to continue as more and more businesses transition to digital,” he said.

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