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Milan Fashion Week: Palazzo photoshoot is Gucci’s post-lockdown show; D&G does a live catwalk

MILAN — Gucci abandoned the catwalk for the launch of its new “Epilogue” collection on Friday, opting instead for portraits of its designers modelling their creations and a 12-hour livestream video from its campaign shoot in a resplendent palazzo in Rome.

With social distancing measures and travel restrictions preventing foreign models as well as guests from flying in, the coronavirus pandemic has forced high-end labels to throw out the traditional fashion show format.

Creative director Alessandro Michele, who took the helm at Gucci in 2015, said Friday’s event was the last in a three-part series focusing on the making of clothes and the behind-the-curtains work that goes into a fashion collection.

The livestream video of the photoshoot at the stuccoed 16th century Palazzo began at 8 a.m. (0600 GMT), and showed staff at work styling the brand’s designers as models, many wearing face masks and visors.

In a 20-minute segment to showcase the new collection, Gucci presented portrait pictures of its designers wearing the clothes they created for Epilogue, meant to be both seasonless and genderless and due to enter stores in the autumn.

Michele’s flamboyant, flowery dresses, the use of bold colors and a nod to the 1970s have helped turn Gucci, part of French group Kering, into one of the fastest-growing brands in recent years.

Friday’s show was part of a journey that “wants to generate a questioning about the rules, the roles and the functions that keep the world of fashion going,” Michele said in a statement.

Back in February, just days before the coronavirus pandemic emerged in Europe after first hitting China, Gucci’s women fashion show in Milan had featured guests entering the brand’s headquarters through the backstage area, walking past desks where stylists worked on models’ hair and makeup.

Michele has said the pandemic should trigger a rethink of the fashion calendar and how collections are presented, and announced in May that he would cut the number of yearly shows to two from five.

Months of lockdown have forced high-end fashion houses to shut shops across the globe and idle manufacturing sites, leaving them with piles of unsold stock.

Gucci’s collection was presented on the last day of Milan’s menswear fashion week, which like post-lockdown shows in Paris and London was held in mostly digital-only format, without the usual contingent of foreign buyers, media and influencers.

MASKS AND SOCIAL DISTANCING AT DOLCE & GABBANA
No air kissing and no hugs, a safely distanced front row and face masks were de rigueur as Dolce & Gabbana had to rewrite the rules of high-end fashion engagement with one of the first physical shows of the COVID-19 (coronavirus disease 2019) era on Wednesday.

Part of Milan’s otherwise digital menswear fashion week, the open-air show was attended by guests wearing face masks as models strode down the catwalk and then stood in a garden a meter apart.

It was held on the university campus of the Humanitas medical research foundation, which is trying to develop a vaccine against the novel coronavirus — a project Dolce & Gabbana are helping to fund.

Together with another Italian brand, Etro, which also held a physical show with guests earlier on Wednesday, Dolce & Gabbana’s was the first real-world fashion event by a major luxury label since the easing of lockdown restrictions in much of Europe.

Designers Domenico Dolce and Stefano Gabbana had said in the run-up that it took them a long time to figure out whether organizing such a show would be possible at all, but that they wanted to send a message of optimism and that Italy — one of countries hardest hit by the pandemic — is back in business.

As the health crisis forced luxury houses to shut shops and idle manufacturing sites, brands canceled events or opted for audience-free, digital-only formats, such as the Paris Haute Couture showcase earlier this month.

Fashion weeks are a crucial moment for designers to showcase their creations with media and buyers, and both industry leaders Italy and France hope to hold back-to-normal events in September.

Inspired by the colors of the Amalfi Coast and its sea, Wednesday’s Dolce & Gabbana spring/summer 2021 menswear show in Rozzano, south of Milan, featured 102 pieces of clothing in various shades of blue, some with prints of neoclassical statues.

It was attended by around 200, mostly Italian guests — compared with 500 or more in normal times. The usual front row of A-list foreign celebrities and large Chinese contingent of buyers, media and influencers was kept away by coronavirus restrictions on travel.

Models did not wear masks on the catwalk — the brand recently launched a collection of pajamas with matching face masks — but the two designers did for their traditional end-of-show appearance.

The show, which had suppliers working for free and was aimed at supporting Humanitas’ COVID-19 research, triggered a debate on Twitter about having a public gathering with many countries still under lockdown and lingering fears of a second wave of infections.

London-based veteran fashion journalist Luke Leitch, who made the trip to Milan, had no qualms.

“Milan feels secure, with masks and temperature checks prevalent. Great to see fashion and friends again,” he said on Instagram. — Reuters

Ayala affiliate caps offer to take over Australia’s Infigen

By Adam J. Ang

AN AUSTRALIAN affiliate company of Philippine-listed conglomerate Ayala Corp. will no longer outdo the offer of rival bidder Iberdrola, S.A. to acquire Infigen Energy, Ltd.

UAC Energy Holdings, a 75%-owned firm of Ayala-led AC Energy, Inc., will no longer alter its A$0.86-per-security offer and extend the acceptance period beyond July 24, it told Infigen shareholders via its latest supplementary bidder’s statement sent to the Australian Securities Exchange.

To recall, the company’s present offer price was raised by six cents on June 29, signaling a bidding war with Iberdrola, which immediately responded with a revised bid of A$0.89 per security, topping the former’s offer by 3.5%.

UAC Energy said it still may revise its offer before the end of the acceptance period should it receive 5% more tendered shares from its present 13.72% stake at Infigen.

Separately, Infigen maintained its position to reject the Ayala affiliate’s bid, noting the superiority of Iberdrola’s offer.

The Spanish multinational utility last week waived the minimum acceptance condition for its offer, making it wholly unconditional. It is now holding a 24.06% interest at Infigen.

Compared with UAC Energy’s payment term of 10 business days, Iberdrola will pay shareholders within five days upon their acceptance. Its offer period will end on July 30.

Moreover, the two competing bids are already cleared by Australia’s Foreign Investment Review Board.

Both firms have pounced on the renewable energy company after its security prices dropped with the fall in power prices in the country.

Iberdrola is one of the biggest energy players in the world having over 55 gigawatts (GW) of installed capacity in Spain, the United Kingdom, South America, and the United States. It serves around 34 million power consumers worldwide.

Meanwhile, UAC Energy is 75% owned by AC Energy. The remaining 25% is held by UPC\AC Renewables Australia, a joint venture of the Ayala unit and Hong Kong-based UPC Renewables Group.

Ayala Corp. has said that the Infigen investment is a “crucial move” for AC Energy’s regional expansion as it aims to boost its renewables portfolio, filling half of its target 5 GW by 2025.

Closed borders and strandings are keeping travelers wary: Here’s what the industry needs to do to win them back

By Luz Wendy T. Noble, Reporter

WHEN the border closures were announced, Krysten Mariann Boado was in Kyrgyzstan, two years and 15 countries into her goal of traveling across half the planet.

Up to that point, Ms. Boado had been stuck in the country for eight months, well beyond her original plan of visiting friends briefly, which had been prolonged unexpectedly by ovarian surgery.

With the intention of avoiding visa complications that might derail her plans to travel elsewhere, she faced a mad dash to the Kazakhstan border.

Which was closing in 24 hours.

Her only mode of transport? Hitchhiking.

“This was one uncertainty that I couldn’t prepare for… I could have been be a carrier (of the coronavirus),” Ms. Boado said in a Zoom interview, expressing her dread at having to cut the journey short and head home.

While Ms. Boado’s case is extreme, stories of tourist strandings during the pandemic and desperate attempts to find “sweeper flights” back home have become a staple of traveler horror stories, which are adding an unwanted layer of fear to the already-worrying prospect of crossing an international border, with all that entails — including being turned back or detained in quarantine.

OBSTACLES TO REVIVAL
With tourism hanging by a thread, the Philippines is grappling for a way to resuscitate the visitor trade, and has had to contend with local governments playing by their own rules.

Tourism Secretary Bernadette Romulo-Puyat, in a text message, said: “Local government units (LGUs) are not yet keen on opening their destinations because they are still preparing and implementing the safety protocols and measures for the welfare of both tourists and citizens.”

While the snags are worked out, tourism businesses are waiting for the visitors to return. Some have proved unable to wait any longer.

Maria Monina Atienza-Santos, a Siargao spa operator, had to let go of her staff after a long closure dictated by the lockdown.

“After I gave them financial assistance, I told them to wait until the situation improves,” she said in a Facebook message, adding that she still needs to pay rent despite the closures.

Ms. Santos also operates a cafe, which remains closed, and a laundry, which has reopened.

“Stranded tourists are not much inclined to use laundry service. We have had between two and five clients compared with 20 on a normal day. Residents have used the service much less since the crisis,” she said in Filipino.

Ms. Santos said she has yet to receive aid from the Department of Tourism or the LGU. At the top of her wish list right now is a 50% rent discount.

“We are in danger of losing everything that we worked for… Rather than accumulate debt, we might have to let go of the business,” she said.

IN LINE FOR AID
Tourism, one of the hardest-hit industries worldwide alongside restaurants and airlines, is currently front and center for governments considering massive stimulus packages.

So far, the industry has been aided only indirectly in the form of wage subsidies for all small firms, according to Tourism Congress of the Philippines President Jose C. Clemente III.

In Manila’s walled city, some other workers who depend on the visitor trade have also received relief measures, according to Intramuros Administrator Guiller B. Asido.

“We assisted 190 people (pedicab drivers/vendors/tour guides) through our endorsements to DoLE (the Department of Labor and Employment) and NCCA (National Commission for Culture and the Arts) since March,” Mr. Asido said in an e-mail.

In addition, Mr. Asido said the Intramuros Administration has also been working with government agencies and non-government organizations find alternative sources of income while visitor restrictions are in place.

WAITING FOR VISITORS TO RETURN
But relief measures are no substitute for the return of actual visitors and free-spending, adventurous locals.

The Department of Tourism (DoT) estimates first-quarter tourism revenue at P85 billion, down 25% from a year earlier, with the second quarter, during which most of the hard lockdown on Luzon took place, expected to be even worse.

“Second quarter figures will be worse as they will reflect at least 1.5 months of the Luzon-wide lockdown, with other stay-at-home policies in other provinces and regions. International and domestic tourism has been halted totally,” Asian Institute of Management (AIM) economist John Paolo R. Rivera said in an e-mail.

Mr. Clemente, who is also president of travel agency Rajah Tours Philippines, Inc. said beyond wage subsidies, the travel industry is hoping for the passage of laws that will stimulate actual business recovery.

“We are waiting for the passage of Bayanihan 2 and ARISE (Accelerated Recovery and Investments Stimulus for the Economy) bills for fiscal measures meant to ensure business continuity,” Mr. Clemente said.

Bayanihan 2, the sequel to the initial aid package known as the Bayanihan to Heal as One Act, allocates P10 billion for the tourism industry while ARISE sets aside P58 billion for the sector.

Mr. Clemente said the industry has also asked for tax breaks to help it recover from the lockdowns.

“Most stakeholders are MSMEs (micro-, small, and medium-sized enterprises) so one can imagine the financial burdens at the moment,” he said.

His realistic scenario for a tourism industry bounce-back timeline is 12 to 18 months with a vaccine, and 18-24 months without one.

SAFETY
For outbound travelers, the main issue is how to stay safe — and destinations must figure out how to strike a balance between safety and convenience, though safety currently has the upper hand.

“The number one concern for tourists when traveling in a post-lockdown world would be safety. They believe that stringent health measures are an indication that a country or destination is safe, which will in turn build their confidence when traveling,” Ms. Romulo-Puyat said.

The DoT has released provisional accreditation guidelines for tourism-related enterprises including travel and tour services, transport services, operators of recreational activities connected to tourism, restaurants and shops, to ensure that they will follow safety protocols from the Department of Health.

DoT-accredited restaurants, for one, will only be allowed to operate with a 50% seating capacity in a “new normal” scenario, with their food safety practices, disinfection, and employee health monitored.

Mr. Clemente said such requirements will inevitably impose costs on businesses, and some might not be in a position to comply.

“Companies have to examine how viable their operations are and may need to make very hard decisions whether to continue or fold,” he said.

Mr. Clemente said the industry will have to be more flexible on cancellations, rebookings and refunds to stand out.

AIM’s Mr. Rivera said the new business environment will force the industry to be more agile in dealing with the stricter social distancing and sanitation requirements, but tourists may still stay away regardless of their efforts because travel is expected to become more expensive.

Ms. Romulo-Puyat said according to an industry survey, respondents planning to travel after the lockdown favor beach destinations, followed by road trips. She said the government’s plan is to get domestic tourists to explore nearby destinations to kick-start the industry in the early phases of reopening.

“We are seeing an increasing interest in farm tourism, hiking, and health and wellness. Travel trends are leaning towards private tours and exclusive island getaways, influenced by social distancing measures,” Ms. Romulo-Puyat said.

EMERGING STRATEGIES
The focus on not-too-distant destinations, and the near-miss experience of surviving the pandemic, which will turn travelers’ thoughts towards sustainability, might mean some locations could be in more demand as well.

“One of the best models of sustainable tourism in the Philippines is Masungi Georeserve — they have a limit on the number of tourists they can accommodate, they do tree planting for tourists, and they patronize the community’s produce in the meals they prepare for tourists,” Mr. Rivera said.

Masungi Georeserve in Baras, Rizal, is in a conservation area along the Sierra Madre range and offers trail exploration for groups of up to 14 people.

Another emerging practice might be to limit visitors from countries or regions thought to be safe — the so-called “travel bubble” strategy.

Starting this month, the European Union will open its borders to leisure travelers from countries with low COVID-19 (coronavirus disease 2019) infections, while Australia and New Zealand are making similar plans.

Ms. Romulo-Puyat said the DoT is exploring such bubbles or green corridors within ASEAN “as soon as travel restrictions are relaxed.” “It works for us better because we are an archipelagic nation with quite a number of small island destinations that are easy to manage and contain, such as Boracay, Palawan and Bohol,” she said.

Boracay opened itself to visitors from the Western Visayas starting June 16, after the island moved to a more relaxed form of quarantine on June 1.

THE VIRTUAL VISITOR EXPERIENCE
Ms. Romulo-Puyat said the DoT has also launched a digital campaign, “Wake Up in the Philippines,” which features 360-degree virtual tours of 16 regions, and cooking videos, in a bid to keep the Philippines “top-of-mind” among travelers while physical travel remains out of reach.

Intramuros has also launched a #TravelFromHome campaign featuring photos and artwork of private citizens, as well as online heritage forums.

“The goal is to educate the public about specific topics about Intramuros and the nation, allowing them to “travel” as if doing an actual tour in Intramuros, while they are in the comforts of their homes,” Mr. Asido said.

Brown rice demand from industry buyers declines

DAVAO CITY — Supermarket sales for brown rice increased during the public health emergency, making up for the drop in demand from corporate clients, according to Sun Made Brown Rice producer Mindanao Agri Network Corp. (MANCOR).

Carlo C. Lorenzana, vice-president of MANCOR, said orders from major supermarket chains were higher during the strict lockdown months between mid-March and May.

The company also tapped online shops Pacific Bay and Hometown Grocer for distribution.

“So we were able to partly make up for the dip in (big volume) trade sales, but not completely,” he said in an e-mail interview.

Mr. Lorenzana said the boost in retail demand allowed the company to stay on time with payments to partner farmers, who needed cash as the lockdown coincided with the peak harvest season.

“We are obligated to honor our agreements with them. The core of our social enterprise where we assist farmers in planting premium palay (unmilled rice) for production of Sun Made brown… and we purchase these palay directly from them,” he said.

He added that rice farmers in general did not feel the health and economic blow of the pandemic as rural areas remained largely safe from the outbreak.

“Farmers in other areas were also able to increase the selling price of palay due to the high demand brought about by the municipal ordinances during the lockdown that restricted the selling of goods within their respective areas,” he explained.

MANCOR is currently exploring new revenue streams while adjusting to the health safety protocols in both office and mill operations.

“We view things now as the ‘next normal,’ meaning it’s the next phase of life for the whole world. So for our social enterprise, we need to adapt and evolve for the changing times,” Mr. Lorenzana said. — Maya M. Padillo

UNIQLO opens PHL online store

JAPANESE CLOTHING retail brand Uniqlo has opened its online store in the Philippines via a dedicated app and website which is meant to “provide a faster and more convenient shopping experience to customers,” and is meant to complement the brand’s more than 30 stores in the country, according to a release.

“We are pleased to announce that everyone can now shop his favorite LifeWear pieces on Uniqlo’s mobile app and website. The launch of Uniqlo Online store stems from the brand’s commitment to [make] LifeWear clothing more accessible to our customers nationwide. Our mission has always been about improving the lives of everyone through high quality clothing, outstanding level of service, and a unique shopping experience. We are deeply excited for our customers to enjoy the online store for themselves,” Masayoshi Nakamura, COO of Uniqlo Philippines, said in the release.

The online store features extended sizing (items can go as small as XS to as big as 3XL), a click and collect option, a pay-in-store payment option, and app barcode scanner.

For those who want their items delivered, a minimum purchase of P2,500 is required for the free shipping option, otherwise a shipping fee of P120 will be charged. Delivery time is two to three working days for Metro Manila, three to five working days for Luzon, and four to seven working days for Visayas and Mindanao.

Those who prefer to collect their items in store, they can select the click and collect option where they check out their items via the app or website and collect their purchase at the store of their choice once they receive an e-mail saying their items are ready. The pickup schedule can range from two days to a week depending on the location. There is no minimum purchase requirement for this option.

Customers can either pay online via credit cards or debit cards, or they can pay in store.

The Uniqlo app also has a barcode scanning feature to see if a particular item is in stock online and in stores near the customer. The company called this their “self-service inventory check” feature.

The Uniqlo online store can be accessed via Uniqlo.com or via the Uniqlo app which is available at the Google Play Store and Apple App Store. — Zsarlene B. Chua

SEC permanently shuts CROWD1

THE Securities and Exchange Commission (SEC) has denied the request of CROWD1 Asia Pacific, Inc. to have its shutdown order lifted.

In a statement over the weekend, the corporate regulator said its cease-and-desist order against CROWD1 has been rendered permanent when it denied the company’s motion to lift the order.

“A careful review of the (motion) will show that except for its general denials, CROWD1 failed to present any evidence in support of its claim that it is not engaged in the sale and/or offer for sale of securities in the form of investment contracts,” the SEC said.

To recall, the SEC ordered CROWD1 to shut down in May after it was found to operate a fraudulent investment scheme.

CROWD1 has since filed a motion to lift the order, but was rejected by the SEC for lack of merit.

The regulator said CROWD1 solicited and accepted investments from the public in the guise of a digital marketing business. Through its investigation, the SEC found CROWD1 offered “educational packages” priced P6,000 to P240,000 and promised investors several bonuses through referrals.

The SEC said this violates the Securities Regulation Code, which requires that an operator obtains a license from the SEC to offer investment contracts.

“CROWD1 neither secured a secondary license to operate as a broker/dealer, registered as issuer of mutual funds, exchange-traded funds or proprietary/ nonproprietary shares, nor registered any securities,” it said.

CROWD1 is now ordered to permanently stop engaging in investment activities and to stop promoting its schemes online. It is also prohibited from transacting any business involving funds in its depository banks. — Denise A. Valdez

Rates of Treasury bills seen moving sideways

RATES OF Treasury bills (T-bills) on offer on Monday will likely move sideways on ample demand and while the retail Treasury bonds (RTBs) are on sale.

The Bureau of the Treasury (BTr) is set to borrow P20 billion via T-bills on Monday: P5 billion each via 91- and 182-day debt papers and P10 billion via the 364-day securities.

Meanwhile, the BTr canceled the offering of seven-year Treasury bonds (T-bonds) scheduled on Tuesday to give way to the ongoing RTB offering.

Traders interviewed on Friday said they expect yields on the T-bills on offer to move sideways as the market remains liquid, with one trader projecting rates to slip by five to 10 basis points (bps).

“For the T-bills, we still see lower rates, by around 5-10 bps from the previous auction…(due to) sufficient liquidity in the market and preference on the short-term,” the first trader said via phone.

The second trader said yields will move sideways versus the previous auction since rates are already very low and some players might opt to buy the five-year retail bonds currently on sale.

“With the RTB (still on offer), some of it pwede ’yung mga interested baka mapunta sa RTB pa eh (some interested investors can opt for the RTBs), otherwise, more sideways kasi masyado mababa na rin ’yung yields (yields will move sideways movement since they’re already low),” the trader said.

Last week, the BTr made a full award of the P20 billion in T-bills it offered as rates declined across-the-board, with total bids soaring to P93.974 billion.

It accepted P5 billion as planned in three-month papers from total tenders of P21.065 billion at an average rate of 1.587%, lower compared to the 1.649% rate seen in the July 6 auction.

It also made a full award of the six-month T-bills, raising P5 billion from P27.1 billion in bids at an average rate of 1.687%, down from 1.75% previously.

For the one-year securities, the BTr raised P10 billion as planned from tenders worth P45.809 billion. The papers fetched an average rate of 1.782%, from 1.855% previously.

Yields on the 91-, 182- and 364-day debt papers were at 1.587%, 1.66% and 1.838%, respectively, at the secondary market on Friday, the PHP Bloomberg Valuation Service Reference Rates showed.

Both traders said demand for the T-bills will not be very affected by the ongoing RTB offer since these securities cater to different clients.

“Given the current uncertainties in the market, most investors prefer to really stay in the short-end so that’s why we continue to see strong demand on T-bills,” the first trader said.

The BTr is offering five-year RTBs carrying a coupon of 2.625%. The offer period is scheduled to run until Aug. 7, unless closed earlier.

At the RTB rate-setting auction on Thursday, investors swamped the offer, with total bids hitting P278.572 billion, almost ten times the initial P30-billion offer. This prompted the Treasury to upsize its award to P192.71 billion.

This marked the second RTB sale of the government this year and 24th overall, following the issuance in February when it raised a record P310.8 billion from three-year retail bonds at a rate of 4.375%.

The BTr also opened an exchange offer program wherein bondholders of the RTB 10-01, FXTN 05-73, RTB 10-02 or FXTN 07-57, can swap their old securities for the new RTB.

“The total outstanding amount of bonds eligible for the switch is about P321 billion,” the Finance department said in a statement over the weekend.

The retail bonds will be issued on Aug. 12 and are set to mature on Aug. 12, 2025.

Meanwhile, the second trader said the market is very liquid right now and some players are opting to stay on the sidelines while they look for other channels to invest in, such as the upcoming short-term securities of the Bangko Sentral ng Pilipinas.

“The market is very liquid so it’s more of kung saan pwede mag-invest (It’s a matter of where to invest). With expectation of more corporate debt to issue and even BSP will be issuing their (securities or) T-bills version sa market, so I guess medyo, based on the yield na talaga (investors are now looking for yield),” the trader said.

The central bank has said it will issue the BSP securities this quarter to provide more risk-free assets for investors aside from the government instruments.

The government has set a P205-billion borrowing program for July and will offer P145 billion in T-bills via weekly auctions and P60 billion in T-bonds to be auctioned off fortnightly

It borrows from local and foreign lenders to plug its budget deficit seen to hit 8.4-9% of gross domestic product this year. — B.M. Laforga

Bali hotels go on sale for cheap with virus hammering tourism

GONE are the Australian surfers and Chinese tour groups. Also missing are yoga aficionados seeking inner peace, like Julia Roberts in Eat Pray Love.

With no tourists and no income courtesy of the coronavirus pandemic, struggling hotel owners on the Indonesian resort island of Bali have been forced to put their properties up for sale. Given the dire state of the market, some may have to stomach a loss. For investors with a long view, it’s a chance to grab a slice of paradise on the cheap.

Balangan Wave, a 50-villa resort under construction near its namesake surfing beach, has hit the market, and developer Michael Halim has slashed his asking price to $9 million from $17 million in May.

“In the current market, one can’t avoid selling at a loss,” Halim said. “Businesses are closing, there’s cash flow issues.”

While the halt to international travel has devastated holiday hot spots from Hawaii to Phuket in Thailand, Bali is more vulnerable than most. Tourism accounts for more than 60% of the island’s economy, providing jobs for everyone from chefs and cleaners at five-star resorts to self-employed guides and drivers.

A record 6.2 million travelers flocked to the island’s beaches, hotels and yoga retreats in 2019.

This year, tourist arrivals slumped 22% to 1.04 million in the first quarter, even before the worst of the outbreak. Now, the usually pumping beach clubs lie quiet and the once-thronged Tanah Lot Temple is deserted.

While major global chains such as Marriott International, Inc. and Hilton Worldwide Holdings, Inc., have the financial firepower to stay afloat during the pandemic, smaller hotels at the budget end of the market are struggling to survive. The number of lodgings listed for sale in Bali has jumped 30% since the pandemic struck, according to Indonesian property firm Galaxy Kuta.

“It’s a good time to buy,” said Chandran V R, managing director of Singapore-based Cosmopolitan Real Estate, which is handling the Balangan Wave sale. “Bali will bounce back to normal. When that happens, prices will soar again.”

Also looking for a buyer is the two-star POP! Hotel Teuku Umar in Denpasar. With eye-catching neon window frames and interiors, the 140-room hotel was put up for sale for $7.7 million in May.

Situated a 30-minute taxi ride from Kuta and Seminyak beaches, and with rooms as low as $14 a night, it was a hit with backpackers. Not anymore.

“The hotel has no income at all and has maintenance costs to pay,” said Meirina Rajianto, an agent at Bali-based Galaxy Kuta, who is handling the sale. “The owner decided to sell rather than bleeding more money.”

Before the coronavirus hit, hotel deals across Asia Pacific were at record levels, fueled by cashed-up private equity and real estate funds, along with wealthy individuals, said Corey Hamabata, senior vice president of JLL’s hotels and hospitality group in Hong Kong.

Among those drawn to Bali was the Trump Organization, which signed an agreement in 2015 to lend its name to a new hotel and golf club on the island. Even it is scaling back, with its local partners signaling last week they may opt for a four- or five-star resort — not six — to make it more affordable.

Still, buyers are likely to remain active as opportunities to buy discounted assets arise, Hamabata said. “We expect most buyers will be driven by three main themes: buying at a discount; buying under-utilized properties to improve them; or buying properties in strategic locations to grow a brand or platform.”

A growing domestic travel market in Indonesia, the world’s fourth-most populous country, may also prop up hotels until the globe-trotters return. The number of internal trips rose to 303 million in 2018 from 270 million in 2017.

“We are expecting domestic demand will be quicker to recover than international demand,” said JLL’s Hamabata.

While the island of 4.2 million had early success in containing the virus, it has recently seen a spike in infections to more than 1,400, with 13 deaths. Indonesia has surpassed 54,000 cases, with 2,754 deaths, making it the worst hit Southeast Asian nation.

That may dent plans to reopen Bali’s economy. Under a three-step strategy, domestic tourists would be allowed back in August, with international sun-seekers welcomed in September if everything goes according to plan, the Jakarta Globe reported, following a visit by tourism minister Wishnutama Kusubandio to the island.

Even in the best-case scenario, it’s unlikely tourists will arrive in droves.

Its biggest source of tourists, Australia, has signaled it’s likely to keep borders closed until next year. In Singapore, just a 2 1/2-hour flight away, the government is only allowing essential trips and has warned that mass holiday travel will take longer to resume.

That makes Bali a risky bet. The 5,780-square-kilometer island has more than 4,300 hotels, according to government figures. Intense competition at the budget end of the market had many hotel owners strained even before the virus hit.

“Those with little cash flow to cover the lockdown period and unable to restructure or delay debt payments will likely come under pressure very quickly,” said Govinda Singh, head of hotels and leisure for valuation and advisory services in Asia at Colliers. — Bloomberg

One in four British fashion jobs may disappear, group says

MORE THAN a quarter of jobs in the British fashion industry may be lost because of the fallout from pandemic-induced lockdowns, a study shows.

About 240,000 of the 890,000 people employed in fashion in the UK are predicted to lose their jobs, the British Fashion Council (BFC) said in a statement Thursday, citing data from Oxford Economics. The figure increases to 350,000 if supply chain positions and other indirect roles are included, which is equivalent to 1% of the UK’s total workforce, according to the report.

“The COVID-19 recession could hit the fashion industry twice as hard compared to the UK overall,” the BFC said. “An entire generation of creative talent is threatened to disappear, putting in danger the UK’s position as the creative crucible of global fashion.”

Revenue generated by the industry will drop by more than a quarter to 88 billion pounds ($110.40 billion) this year from 118 billion pounds in 2019, the fashion council estimated. UK fashion house Burberry Group Plc announced plans on Wednesday to eliminate 500 positions globally, including 150 in the UK, after lockdowns caused revenue to plunge by almost half in the three months ended in June. That represents about 5% of the company’s total workforce.

The government should provide assistance by enabling lease renegotiations when landlords don’t act responsibly, and granting moratoriums on duties and tariffs, among other measures, the not-for-profit industry group said in the statement. — Bloomberg

Megaworld targets sales of P1.5 billion from condo tower in Iloilo City township

MEGAWORLD CORP. has recently launched a new condominium tower project in its 72-hectare township in Iloilo City.

In a statement over the weekend, the property developer said it aims to expand its residential portfolio in the Iloilo Business Park with the introduction of the township’s sixth residential property.

The new project, called The Pinnacle, is scheduled for completion in six years. It is expected to raise P1.5 billion in sales.

The 20-storey condominium is composed of 572 residential units offered in varying sizes, namely studio (up to 34 square meters), studio with loft (up to 56 sq. m.), executive studio with loft (up to 73 sq. m.), one-bedroom (up to 40 sq. m.), executive one-bedroom (up to 61 sq. m.), two-bedroom (up to 84.5 sq. m.), two-bedroom with loft (up to 89.5 sq. m.), and two-bedroom with deck (up to 113.5 sq. m.).

It will also have an amenity deck with a lap pool and a kiddie pool, a fitness center, an outdoor fitness area, a function room, an outdoor lounge, a daycare center, a children’s play area, a jogging path, a private dining room and an atrium garden.

“Iloilo City, particularly Iloilo Business Park, remains to be an attractive location for property investments,” Jennifer Palmares-Fong, Megaworld Iloilo vice-president for sales and marketing, was quoted as saying in the statement.

“Since we started selling our first residential condo tower here in 2013, prices per square meter have already more than doubled. Those who bought a P3-million unit with a size of 40 square meters seven years ago would see their property appreciating to P6.8-million today,” she added.

The other residential projects Megaworld has introduced in Iloilo City are One Madison Place, Lafayette Park Square, The Palladium, Saint Honore and Saint Dominique. These make up the 1,741 units in Iloilo Business Park’s current residential inventory.

Aside from residential projects, Iloilo Business Park also offers commercial establishments and office spaces. Megaworld is investing P35 billion to develop the township over a 10-year period.

In the first quarter, Megaworld’s earnings slid 9% to P3.5 billion due to a non-recurring gain and a flat topline. The coronavirus pandemic pulled revenues from its hotel business, which fell 4% to P551 million.

Shares in Megaworld at the stock exchange shed one centavo or 0.32% to close at P3.15 each on Friday. — Denise A. Valdez

LANDBANK receives further P1.44B for agri loan program

AN ADDITIONAL P1.44 billion was transferred to the Land Bank of the Philippines (LANDBANK) by the Department of Agriculture (DA) for a lending program targeted at farmers, fisherfolk and agripreneurs.

Agriculture Secretary William D. Dar said the lending program, known as the Agricultural Competitiveness Enhancement Fund (ACEF), can now lend out nearly P6 billion to the targeted beneficiaries.

“The fresh funds augment the previous P4.50 billion the DA has cumulatively entrusted to LANDBANK, being the administrator of the ACEF lending program,” Mr. Dar said.

The DA said the ACEF lending program focuses on increasing the production and incomes of farmers and fisherfolk through credit to purchase agricultural equipment, facilities and farm inputs.

LANDBANK President and Chief Executive Officer Cecilia C. Borromeo said the bank has approved P3.68 billion worth of projects under ACEF, with P796 million worth of applications still being processed.

ACEF-funded projects are concentrated in the Cagayan Valley and the provinces of Occidental Mindoro, Nueva Ecija, Isabela and Capiz.

The DA said that farmers in Northern and Central Luzon have availed of ACEF loans amounting to P1.4 billion, followed by Mindanao at P923 million, Southern Luzon at P704 million, and the Visayas at P693 million.

Individual farmers and fisherfolk can borrow from ACEF up to 90% of their total project cost, not exceeding P1 million, while farm cooperatives and associations, and micro and small-scale enterprises may borrow up to P5 million at 2% interest per annum.

The DA said that 80% of the funds in ACEF go to loans, 10% to research and development grants to accelerate the commercialization of agricultural and fishery products, and 10% to scholarships for studies in agriculture, forestry, fisheries and veterinary medicine.

Implemented in 1996, the ACEF loan program will end in December 2022 and is funded by tariffs and duties collected on imports of agricultural products except rice.

Mr. Dar said he plans to ask the Department of Budget and Management for another P2.1 billion for ACEF. — Revin Mikhael D. Ochave

Yields on government debt end flat

YIELDS ON government securities (GS) ended flat last week after the Bangko Sentral ng Pilipinas (BSP) said it will keep an accommodative policy over the next two years as well as the recent outcome of the retail Treasury bond (RTB) offering.

Debt yields, which move opposite to prices, inched up by 0.1 basis point (bp) on average week on week, the PHP Bloomberg Valuation Service Reference Rates as of July 17 published on the Philippine Dealing System’s website showed.

“Market was initially seeing some buying interest at the start of the week as the central bank said it will maintain easy policy for the next two years to jump-start economic activities,” First Metro Asset Management, Inc. (FAMI) said in an e-mail interview.

“Action reversed following auction results for the new five-year RTB with bids advancing most in the belly area,” FAMI said in an e-mail interview, adding that there was “good pickup for the issuance.”

“Yields were broadly unchanged over the week as the upward pressure from liquidity needs for the latest retail treasury bond offering was offset by renewed safe-haven bond demand amid the escalation of geopolitical tensions between the United States and China.” a bond trader said in separate e-mail interview.

In an interview with Bloomberg on Tuesday, BSP Governor Benjamin E. Diokno said that for at least two years, it will keep its bond-buying and liquidity support programs to accommodate the economy. This signal came after the central bank chief said there’s space to adjust policy further but there’s no need to trim key rates in the coming quarters.

The central bank’s Monetary Board last month decided to cut policy rates on the overnight reverse repurchase, lending, and deposit facilities by 50 bps to new record lows of 2.25%, 2.75 and 1.75%, respectively.

This brought cumulative reductions this year to 175 bps as the BSP looks to support the economy against COVID-19.

Meanwhile, investors flocked the government’s latest five-year RTB last Thursday as it raised a total of P192.75 billion at a 2.625% rate. The auction was met by total bids reaching P278.572 billion, nine times more than the P30-billion initial offering, prompting the Bureau of the Treasury to hike the award.

Last week, Reuters reported that the Trump administration is contemplating an action that would create more tensions to their relations by banning all members of the Chinese Communist Party and their families from traveling to the United States.

Moreover, in response to China’s national security law, President Donald J. Trump directed to put an end to Hong Kong’s special economic treatment which led to China accusing the US saying it was “gangster logic.”

At the secondary market, yields on the 91-, 182-, and 364-day T-bills went down by 10.8 bps, 7.5 bps, and 4.1 bps respectively, to fetch 1.587%, 1.660%, and 1.838%.

Yields at the belly of the curve went up except for the 7-year T-bonds which recorded a marginal decline of 0.1 bp to 2.574%. Rates on two-, three-, four-, and five-year debt papers increased by 2.9 bps (2.048%), 4.6 bps (2.189%), 4.5 bps (2.297%), and 3.3 bps (2.396%), respectively.

At the long end, the 10-year debt paper dropped by 4.1 bps, yielding 2.722%. On the other hand, yields of the 20- and 25-year went up by 9.2 bps and 3.2 bps, respectively, to 3.681% and 3.742%.

For this week, FAMI anticipates GS yields “to correct some more as the market digests the results of the 5-year retail bonds issuance.”

For the bond trader: “Local yields are seen to move higher as expectations of upbeat United states and Eurozone manufacturing reports might revive optimism of a brief recovery in global economic activity.”

“Moreover, lingering domestic liquidity demand for the latest RTB issuance might also exert some upward pressure on yields,” the bond trader added. — Jobo E. Hernandez

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