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The road most traveled

If only we could, like Robert Frost, take the road less traveled. But in our daily lives, the road most traveled on our way to work and back home is also the most hated.

For majority of people in Metro Manila, that’s EDSA. For many others, including me, it’s Roxas Boulevard, which in recent months (especially in December) has become like EDSA. There are no bottlenecks, it’s just traffic all the way from Port Area where the Philippine Star office is located until I turn left on Buendia to take the Skyway, or stay on Roxas Blvd. until Airport and Sucat Roads — all of which are a hot mess. Then there’s España and Quezon Avenue all the way to Fairview.

On Facebook and Twitter every day, friends are complaining about three- to four-hour commutes to get home after a long day at work. On Tuesday, I had to be in Quezon City for an appointment and made sure I left before 5 p.m. It still took me three hours to get to Parañaque.

Are our days going to be like this for the rest of our lives? It feels like we do less work every day and spend more time in traffic. For us who drive our own cars, it’s unproductive time (except for that drive home one night when I finished four episodes of The Good Place on my phone); for people with drivers, it’s a chance to catch up on sleep or work but, really, they’re a small percentage of car owners.

In October last year, Waze named Manila traffic as the worst in the world at 4.88 minutes per kilometer on average. No one was really shocked — we all experience this kind of congestion on a daily basis and the resulting lower back pain from sitting for hours in the office and on the road. In the same report, Metro Manila was followed by Bogota (Colombia), Jakarta (Indonesia), Sao Paulo (Brazil), and Tel Aviv (Israel).

Then there are the studies that estimate how much traffic congestion costs economies on a daily basis. In 2019, the Japan International Cooperation Agency (JICA) said Metro Manila traffic costs us P3.5 billion in lost opportunities per day. That’s P1.2 trillion (US$23 billion) a year — almost a third of the country’s national cash budget for 2019! In a year or five, that cost is the equivalent of what we could build — perhaps some housing for the poor, new facilities for PGH, new trains for LRT, new railroad tracks for PNR, airports, roads, bridges.

A similar study was made for Jakarta last year, which pegged the economic loss for Indonesia at US$4.6 billion (P232 billion) a year — still a lot less than what the Philippines loses annually.

But how do they calculate the economic cost of traffic congestion? It’s one of the most debatable issues in an economy and suffice it to say they have similar methodologies starting with the simple definition of “traffic congestion,” which “occurs when the volume of traffic generates demand for road space greater than the available road capacity.” To Metro Manila residents, that’s become our everyday reality.

Then they collect data, such as the number of hours people sit in traffic, and measure the impact on both passenger transportation and commercial/freight transportation. We may all hate the trucks that clog up our roads, but they’re also responsible for keeping businesses in business, for helping keep our economy afloat. For passengers, it’s loss of productivity, waste of time, fuel consumption, and the wear and tear of vehicles, among others.

A report by CNBC last year on the US situation mentions three cities — Chicago, Washington, DC, and Boston — as having the worst traffic congestion. “The total (cost) last year was US$87 billion, or US$1,348 per driver, according to new data analyzed by research firm INRIX. Each year, INRIX issues a Global Traffic Scorecard based on millions of pieces of data from connected vehicles, departments of transportation, cellular positioning reports and a number of other sources.”

The losses also include the high cost of moving around in our cities versus the actual salaries people receive. In 2018, an officemate spent P100,000 on Grab rides — fares that surge when traffic is heavy and demand is high. (In 2019, Grab didn’t send the year’s summary to its riders.)

The government may build and build new highways and roads, but without an efficient mass transport system — where trains aren’t packed and don’t break down — people will just be buying more cars and clogging up roads.

Visit the author’s travel blog at www.findingmyway.net. Follow her on Twitter and Instagram @iamtanyalara.

In Mexico’s cradle of corn, climate change leaves its mark

TEHUACAN, MEXICO — At least 9,000 years ago, humans began domesticating corn for the first time near Tehuacan, in the central Mexican state of Puebla, laying the foundation for permanent settlements in the Americas.

But in the past few years, more frequent and longer droughts have forced many farmers in the area to give up corn and other cereals in favor of alternatives requiring less water such as pistachio nuts or cactus.

Agricultural experts predict parts of Mexico will feel the effects of climate change more than many countries, not least because its location between two oceans and straddling the Tropic of Cancer expose it to weather volatility.

Sol Ortiz, director of the agriculture ministry’s climate change group noted that 75% of Mexico’s soil is already considered too dry to cultivate crops. In regions such as Tehuacan, temperatures may rise more than the global average.

“We know there are areas where the increase is going to be greater. That will obviously affect rain patterns, and in turn, agriculture and food security,” Ortiz said.

The area under corn cultivation in Tehuacan decreased 18% to about 40,000 hectares between 2015 and last year, a Reuters calculation using statistics by the agriculture ministry shows, outstripping a nationwide decline.

In the five years before that, the area planted with corn had been slowly increasing in Tehuacan.

Nationally, the area under corn cultivation declined 4% from 2015 to 7.4 million hectares last year. While factors leading farmers to switch crops are complex, in Tehuacan farmers and local officials describe fast-changing climate as a leading cause.

Mexico’s rainy season last year was the driest since 2011, which in turn was one of the driest on record, numbers from the country’s national water agency showed.

Climate change is expected to cause substantial declines in yields of corn globally, especially in the tropics, a 2018 study published in the US Proceedings of the National Academy of Science concluded. — Reuters

Under this model, intensive farming meant more moisture being released into the atmosphere from plants on a scale great enough to create more rainfall. The greater humidity also contributed to summers up to 1 degree Celsius cooler, the study by Massachusetts Institute of Technology concluded.

STUNTED COBS
In Tehuacan, however, conditions are fast changing for the worse. In a field where dried out plants have been lingering in the dust since the last drought, farmer Porfirio Garcia, holding a stunted cob, was struggling to make sense of it all.

Corn has for thousands of years been a symbol of Mexican pride, a staple of local and national cuisine from tortillas to tamales and the backbone of civilizations that gave rise to modern Mexico. But climate change has jeopardized that.

Garcia, who has 12 children, half of them working with him on the farm, recalls how one hectare in some years yielded as many as four tonnes (8,800 lbs) of corn In the past five years, he said, with luck it yielded 700 kg (1,543 lbs).

“The corn harvest has shrunk because in the months of June, July, August and September there was no rain,” said Garcia, 59, who uses ancestral farming techniques to grow corn, beans and pumpkin, an ancient system called a “milpa.”

“Our lives center on corn so what do we do without it?”

Eusebio Olmedo, director of rural development, agriculture and livestock in Tehuacan, recalls that it began to get hotter at the turn of the millennium.

Having worked in the department for five years, Olmedo said the area used to be characterized by a “very pleasant, very benevolent” climate.

Last year was the warmest on record in the state of Puebla — where Tehuacan is located — with thermometers reaching an average maximum temperature of 26.8 Celsius (80 F). In 1985, the first year the available state records show, Puebla registered an average maximum temperature of 24.7 Celsius (76 F).

A 2016 study commissioned by the environment ministry and backed by the U.N. Development Program concluded climate change in Mexico will mean less rain, lower yields for basic grains such as corn, beans and wheat, as well as “unexpected effects on food security.”

“When rain patterns change, agriculture becomes risky,” Olmedo said.

Mexican corn farmers have suffered major shocks in the past — most notably the arrival of cheap imports from the United States under the NAFTA free trade agreement in the 1990s.

In the north of Mexico, where large corn fields are irrigated, climate change may initially have little impact, studies show.

But in the south, where the oldest corn strains on earth are grown using traditional methods without irrigation, the changing rain patterns and temperatures are already being felt.

Agricultural consulting group GCMA estimates Mexican corn production will continue to decline in 2020, and that corn imports mainly from the United States will reach a record 18 million tons.

ADAPT
Mexico is now the world’s second-largest corn importer thanks to a reliance on U.S. grain for animal feed. President Andres Manuel Lopez Obrador calls that “a contradiction” and has implemented programs to boost national production.

Garcia, however, chose to diversify into other crops, planting 300 trees of pistachio, a desert plant that can withstand temperatures between minus 10 and 40 degrees Celsius (14 F and 104 F).

Nearby farmer Natalio De Santiago also abandoned the corn that he, his father and his grandfather used to plant for other crops that require less water. Those include maguey, a raw ingredient for mezcal, a Mexican liquor.

“I stopped sowing (corn) because the weather is changing,” said De Santiago, 56. “Now I plant maguey because it needs less water.”

Wearing a cowboy hat to shield his face from the sun, he said he irrigates 400 maguey plants every month with a liter of water each. When he planted corn, he said, his crops needed four months of rain.

Others in the area gave up agriculture altogether and sold land to real estate developers.

In an attempt to stop this trend, local authorities developed a bank of native corn seeds more resistant to pests and that need less water.

“We have to adapt to climate change, and these are the best varieties to recover food self-sufficiency,” Olmedo said of the seeds.

Other government measures meant to help farmers adapt to and mitigate the effects of climate change include agricultural insurance, alternative crops and campaigns to reduce agricultural burning.

“It’s very difficult to reverse the tendency to increase CO2 (carbon dioxide) in the atmosphere,” said the agricultural ministry’s Ortiz. “That’s why we’re prioritizing adaptation.”

“Climate change is here to stay.” he added. — Reuters

Filipina executives top global ranking on leadership role

THE Philippines has topped the list of 32 countries in a global survey on the role of women in senior management.

The Grant Thornton International’s 2020 Women in Business Report showed that 43% of female Filipino executives were in a senior leadership role.

Filipina executives in senior management rose six percentage points from 37% in the 2019 survey, which in turn fell 10 percentage points from 47% in the 2018 report.

Globally, 29% of women in executive roles were in senior management in the 2020 survey.

The Philippines was followed by South Africa with 40% and Poland with 38%. Among other Southeast Asian countries surveyed, Indonesia ranked fifth (37%), Thailand ranked 10th (34%), Malaysia and Vietnam ranked 11th and 12th with 33%. Singapore came out 17th (31%).

The study had a global sample size of 4,812 businesses, with 105 in the Philippines.

“We are seeing that the most significant roles in business operations — strategy, finance, and people — are being held by women. The percentages have decreased this year, and it is interesting to note that women are holding these same three roles,” P&A Grant Thornton Chairperson and CEO Marivic Españo said in a statement.

“We hope to see more women step up into the Chief Executive Officer (CEO) or Managing Director role in the future.”

Broken down, 38% of Filipino women are chief finance officers, followed by 36% that are human resources directors. Following this, 23% are chief operating officers, and 22% are chief executive officers, and 19% are sales directors.

The survey found that 94% of Filipino businesses are actively working on reducing barriers to gender parity at leadership levels.

To promote gender balance in leadership teams, 36% of Philippine businesses said they ensure equal access to developmental work opportunities. Among other measures, 33% provide mentoring and coaching as well as enable flexible work while 30% link senior management rewards to progress on gender balance targets and 26% set targets for gender balance in leadership.

Only 23% offer unconscious bias training, and six percent take no actions to improve gender balance.

P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd. — Jenina P. Ibañez

More Filipino women in senior business roles

BSP sees higher gold purchases due to tax exemption

THE BANGKO SENTRAL ng Pilipinas (BSP) sees increased gold purchases next month after the Bureau of Internal Revenue (BIR) issued the rules exempting from income and excise taxes the golds that traders and small miners sell to the central bank.

BIR Commissioner Caesar Dulay issued Revenue Regulation (RR) No. 4-2020 last week, Feb. 18, the implementing rules and regulations (IRR) for Republic Act (RA) No. 11256 which exempts the gold that traders and registered small-scale miners (SSM) sell to the BSP from income and withholding taxes as well as excise tax.

President Rodrigo R. Duterte signed RA 11256 on March 29, 2019.

The regulations will take effect first week next month or 15 days after its publication on a newspaper on Thursday, Feb. 20.

Sought for comment, the BSP Mint and Refinery Operations Department told BusinessWorldthis will likely increase their gold purchases gradually since the tax exemption privileges require prior documentary approvals.

“The BSP expects an increase in gold purchases when the law takes effect next month. However, we also expect the influx of sales to be gradual taking into consideration the documentary requirements that the law prescribes. Likewise, we anticipate greater benefit to our SSMs due to its use of BSP’s prevailing international market price of gold,” the department said in an e-mailed response.

The tax exemptions are also applicable to the gold that registered small-scale miners sell to traders, which will eventually be sold to the central bank.

“If an excise tax has been otherwise paid prior to the sale of gold to the BSP, the taxpayer may file a claim for refund or credit with the Commissioner of Internal Revenue for the excise tax paid,” the IRR stated.

With this, the BIR said all small-scale miners and accredited traders should secure a tax identification number which the bureau will use as basis for the tax exemption. The bureau will also use a valid certification issued by the BSP as basis for the exemption and non-withholding of taxes.

The BSP Mint and Refinery Operations Department said the VAT exemption’s effect to its existing gold stock is unclear at this time “since there are several factors to consider, such as compliance to requirements especially now that the BSP is strengthening its commitment to responsible sourcing.”

“Nevertheless, the BSP is upbeat in the prospect of returning gold sales to the BSP, and that in turn, will help increase our gold stock,” it added.

Meanwhile, BIR warned that the seller will be “primarily and solely liable for any deficiency taxes” if they find that the tax-free gold, which should be sold the central bank, was not transacted with the BSP. — Beatrice M. Laforga

Fashion ‘raping’ women — Armani

ITALIAN fashion designer Giorgio Armani accused the fashion industry on Friday of “raping” women with short-lived trends and sex-driven marketing.

“I think it’s time for me to say what I think. Women keep getting raped by designers,” Armani, 85, told reporters on the sidelines of a show for his Emporio Armani line at Milan Fashion Week.

“If a lady walks on the street and sees an ad with a woman with her boobs and arse in plain sight and she wants to be like that too, that’s a way of raping her,” Armani said. “You can rape a woman in many ways, either by throwing her in the basement or by suggesting that she dresses in a certain way.”

Armani, known for his sober, elegant outfits, founded his label in 1975 and has built it into a global brand.

“In my show there are short skirts, long skirts, ample and tight trousers. I have given maximum freedom to women who can use all possibilities if they are sensible,” he said. — Reuters

Automotive illumination takes spotlight in Art Fair PH

AC MOTORS showed its support for “the most creative and moving minds in the local and international art scene” at the Art Fair Philippines 2020 over the weekend at The Link in Ayala Center, Makati City. The company’s space at the fair showcased the work of Filipino-American artist James Clar. Using laser lights, Mr. Clar created “fully immersive and engaging light environments that explore perceptions of reality, time and space,” according to an AC Motors release. The artist’s work focuses on the effects of technology on human lives.

Laser, an acronym for “light amplification by stimulated emission of radiation,” has been used in the manufacturing, medical, military and law enforcement, and in the entertainment sectors. In the automobile industry, laser lights (a thousand times more powerful than the latest LEDs) are now being used in headlamps of premium cars “by using a blue laser to produce highly directional white light.”

Mr. Clar lives alternately in New York and Tokyo and maintains productions in those cities, in addition to Manila. He studied film at New York University, then went on to obtain his masters at NYU’s Interactive Telecommunications Program before moving from screen-based work to start working directly with light, creating sculptural lighting pieces. He developed his own systems with which to manipulate light, and discovered he could create unique visual displays, as well as “circumvent the limitations of screen-based work, namely resolution and two-dimensionality.”

In Art Fair Philippines 2020, Clar’s play on laser lights and his work’s portrayal of automotive technology as a medium of communication focused on the “evolving public perception of motoring and mobility, especially in this age of conservation and sustainability where precise and ultra-focused engineering and designs are required of man-made systems to achieve efficiency in time and resources… It is this new age that AC Motors’ six automotive brand partners envision themselves to thrive in, which is why Clar’s representation in this year’s Art Fair Philippines hopes to showcase AC Motors’ focused vision in this sustainable light.”

Formerly known as AC Automotive, AC Motors is now 32 years old and counts 32 wholly owned dealerships comprising its six brand partners: Volkswagen, Kia, Maxus, KTM, Honda and Isuzu. AC Motors is a member of the country’s oldest business house, Ayala, under its industrial technology arm AC Industrials.

Art Fair Philippines, now on its eighth year, is “a premier platform for exhibiting and selling the best in modern and contemporary Philippine visual art, making it accessible to enthusiasts and to those who want to discover one of Southeast Asia’s most exciting art landscapes.”

For more information about the AC Motors companies, visit volkswagen.com.ph, kia.com/ph, maxus.com.ph, ktm.ph, hondamakati.com.ph, and, isuzuautodealer.com.ph.

A taste of Siquijor with Nissan

Text and photos by Angel Rivero

PRISTINE BEACHES, fiery sunsets, magical healers, and the hair-raising mystique of the mangkukulam (voodoo sorcerer). I’ve dreamt of going to Siquijor for the longest time. Access to this third-smallest island province of the country was never straightforward from the capital — though I reckon that this remoteness has in fact, only added to its mysterious charm.

These days, Siquijor is much easier to reach via direct flights to Dumaguete City combined with a 45-minute to one-hour ferry ride to Siquijor’s port. There are several sailings in a day, and fares cost about P400 a person for a business-class seat, which already includes carry-on luggage (otherwise you would have to pay extra to check-in your bag).

Now is a good time to visit the island if you still want to experience its genuinely rustic appeal. Tourist arrivals have grown by roughly 50% in the last couple of years, and Siquijor is now tagged as the next emerging, favorite tourist destination in Central Visayas. While that can mean more hotels and amenities, that can also soon mean more tourist rubbish and chaos. Nevertheless, the island is currently quaint and well-kept — and should definitely be on your visit list for 2020.

In my case, this trip was extra special because Nissan Philippines — in its commitment to enable people to “#GoAnywhere” — had transported its lineup of strong LCV (light commercial vehicle) products (the Nissan Patrol, Terra, and Navara) to the island for us to drive around in! And frankly, driving around the island almost never happens for tourists — as it would be more common to commute around in tricycles, or to rent motorcycles or bicycles for days at a time.

Among the well-known places to visit when in Siquijor are: the Cambuhagay Falls (a series of adjacent, small waterfalls which may be appreciated from a viewing area accessed through down a course of steep steps); the century-old and purportedly “enchanted” Balete Tree (which is surrounded by a watercourse that is home to cleaner fish who would happily chew away the dead skin cells of people who choose to dip in their feet); the San Isidro de Labrador Church or Lazi Church for short (which is a really old church that houses lots of antiques and historical documents from the Spanish colonial period, it practically deserves to become a museum); and any of the beaches — Salagdoong, Paliton, Solangon, and Cagusuan.

Our team traveled to and beyond these destinations with our capable Nissan LCVs. At the peak of our adventurous drive was an off-road exploration into a quarry in the middle of the island. Although this was not accessible via paved roads, there was really no issue for us getting there as the Terra, Navara, and most especially the Patrol, found it easy to negotiate over the uneven earth, through the grass and shrubs, and into the dusty, rocky quarry area. I don’t think I’ve ever heard of Siquijor tourists blogging about visiting a quarry area. But you see, you need special vehicles to get you to special places other people may otherwise not have reached.

The Nissan Terra is nice for bringing around the family, because it has a great amount of space and authentic 4×4 capabilities that enable it to go to adventurous places. The Nissan Navara can carry more cargo and equipment on its rear bed while maintaining car-like comfort for the occupants of its cabin. Moreover, the Nissan Patrol has a super-robust V8 engine that makes negotiating steep climbs practically a no-brainer, as it continues to pamper its passengers with luxurious comfort. All vehicles are also equipped with different features born out of Nissan Intelligent Mobility — which include a 360-degree camera, Hill Descent Control and Hill Start Assist, among others.

Finally, when in Siquijor, I highly recommend that you try the Friday evening special buffet at Baha Bar in San Juan! They only hold it once a week, but it’s an amazing bargain for a buffet that includes fresh fish, large shrimps, home-cooked soups, and unlimited lechon (yes, you heard me right)! For only P450 per person, it’s really quite a no-brainer. Also, they have an amazing selection of cocktails that play with chocolate and fresh juices as their special ingredients.

Tax court denies Deutsche Knowledge appeal over cancelled refund claim

By Vann Marlo M. Villegas
Reporter

THE Court of Tax Appeals (CTA) denied the appeal of Deutsche Knowledge Pte., Ltd., over the cancellation of its tax refund claim worth P28.9 million.

In a nine-page Feb. 14 resolution, the court denied for lack of merit the motion for reconsideration of Deutsche Knowledge, a subsidiary of Deutsche Bank Group in Singapore.

The court in its decision in October last year said the company failed to show that its sales of services for the third quarter of 2013 qualify for value-added tax zero-rating.

The court said the company failed to present specific evidence that some of its service recipients, who are non-resident foreign corporations, were given services other than processing, manufacturing or repacking of goods, which is a requirement in the Tax Code to consider a transaction as zero-percent VAT.

The petitioner claimed that the court erred in relying only on the intra group service agreement (IGSA) to establish the nature of the services it rendered.

It also said that the court should have considered the fact that it is a regional operating headquarters (ROHQ) and can provide services allowed by law which excludes processing, manufacturing or repackaging of goods.

“It must be remembered that petitioner, as a ROHQ, is not prohibited from engaging in services of processing, manufacturing or repacking of goods,” the court said.

“Hence, it is incumbent upon petitioner to present sufficient evidence to show that the services it performed to its service recipients fall under ‘services other than processing, manufacturing or repacking of goods’. However, petitioner failed to do so in the instant case,” it added.

The company also said that it is engaged in services performed only in the Philippines as an ROHQ and it does not necessarily mean that if the IGSA does not indicate the place where service is done, the company has rendered services outside the country.

The court, however, said that Deutsche Knowledge cannot rely on the provision that ROHQs are licensed to do business in the Philippines and it is still needed to be proven.

The testimony of the witness also failed to establish that the services were done outside the country and the verification of its zero-rated sales by the independent accountant “failed to satisfactorily establish the same.”

The court also said the company failed to prove that the sales were rendered to non-resident corporations doing business outside the Philippines.

“It must be emphasized that petitioner failed to refute the findings of this Court. Bare and unsubstantiated allegations do not constitute substantial evidence and have no probative value. As such, petitioner’s bare allegations, unsubstantiated by sufficient documentary evidence, cannot be given credence by the court,” the court said.

The court also countered the claim of the petitioner that the CTA failed to consider the AMINET database, saying the IGSA and foreign business registration retrieved from the database establishes the location and addresses of its clients, proving that its clients are “branches, subsidiaries or segments of the Deutsche Bank Group of Companies which have business domiciles and activities outside of the Philippines.”

The court said that to be considered non-resident foreign corporation doing business outside the Philippines, it must be supported by both the certificate of non-registration or corporation/partnership issue by the Securities and Exchange Commission and certificate of foreign incorporation/association.

It also said that information from the database are not sufficient as “they may be considered self-serving because the said documents were retrieved from the AMINET database, a database set up by Deutsche Bank Group.”

According to the Tax Code, the transaction should be treated as zero-rated VAT if the following elements are met: services must be performed outside the Philippines, recipient of services is doing business outside the country, service offered must be other than processing, manufacturing or repackaging of goods and paid in acceptable foreign currency accounted for in laws of the local central bank.

HSA, AMLA amendments sought

THE ANTI-MONEY Laundering Council (AMLC) has urged lawmakers to speed up the passage of the amendments for the Anti-Money Laundering Act (AMLA) and the Human Security Act (HSA) which are among the “most difficult” for the recommended actions to avoid being re-included in a global dirty money watch list, according to AMLC Executive Director Mel Georgie B. Racela.

“We likewise clarified that we don’t only need to pass the laws, we also have to demonstrate effective implementation, so deadline of October 2020 on the amendments of these laws is not merely for legislation but includes implementation,” Mr. Racela said in a text message on Friday.

The country has been subjected to a 12-month observation period that ends in October to implement the recommendations to improve anti-money laundering (AML) and counter-terrorism financing (CTF) measures in the Mutual Evaluation Report (MER). After which, the country will then be required to submit a comprehensive progress report to the Asia/Pacific Group on Money Laundering (APG).

Failure to comply to the required reforms could endanger the country to again be a part of the list of high risk and non-cooperative countries in terms of AML and CTF measures.

The AMLC has previously said the revisions to AMLA and HSA should be effective by June 2020 to provide room for implementation before the observation period ends in October.

Mr. Racela said AMLC has sought the support of Senate President Vicente C. Sotto, III and House Peter Alan Peter S. Cayetano to fast-track the passage of the two bills.

The bill to revise HSA, House Bill (HB) 7141, has been pending with the Committee on Public Order and Safety since March 2018. Meanwhile, its counterpart at the Senate, Senate Bill 2204, is on second reading and its period of sponsorship as of Feb. 6.

Meanwhile, amendments to the AMLA under HB 6174 is pending with the Committee on Banks and Financial Intermediaries as of Feb. 5. In the Senate, no bill on the amendments has been filed.

Mr. Racela added that the “conviction of terrorist financiers” is also among the “most difficult” in the recommended actions by the MER.

“As for amendments to bank secrecy, we were rated largely compliant in this area so this is not included in our priority actions,” Mr. Racela said.

Among the key revisions in the AMLA under the filed bill are the enhancement of investigating measures that could be done by the AMLC through subpoena power, and including tax related to tax evasion and terrorism financing under AMLA. — L.W.T. Noble

Victoria’s Secret’s challenging makeover

VICTORIA’S SECRET has finally found its angel.

Parent L Brands Inc. said on Thursday that it would sell a controlling stake in Victoria’s Secret to private equity firm Sycamore Partners in a deal that values the lingerie brand at an enterprise value of $1.1 billion.

It’s the end of an era in more ways than one. L Brands is giving up control of its prized asset, once famous for its opulent catwalk shows.

Leslie Wexner will also step down as chairman and chief executive officer of the group. He is the longest-serving CEO in the S&P 500 Index but had drawn attention for his association with the late financier Jeffrey Epstein.

Under the terms of the deal, Sycamore would acquire 55% of the Victoria’s Secret for $525 million, with L Brands retaining 45% of the separate company, which will also contain the younger Pink division.

The transaction values Victoria’s Secret’s total enterprise value at 0.15 times its $7.4 billion of sales in the year to February 2019. That is well below the average of 1.3 times for apparel deals in the last three years, according to Bloomberg data. Shares of L Brands dropped nearly 7 percent when the market opened Thursday morning.

The valuation reflects the fact that Victoria’s Secret is expected make little or no operating profit in the year ended Jan. 31, compared with $1.4 billion in fiscal 2016.

OUT OF FASHION
The sale underlines just how badly the brand has been hurt by many consumers turning their backs on sexy lingerie, preferring more casual and functional underwear and brands that are more inclusive of different body shapes. Comparable sales fell a worse-than-expected 12% in November and December.

The new majority owner will need to invest heavily in revamping Victoria’s Secret’s image and will also need to close a swath of its about 1,200 stores. Although L Brand has tweaked its portfolio, it has resisted the large-scale culling favored by many rivals.

But there is potential for a revitalized chain. For all its challenges, Victoria’s Secret remains America’s biggest lingerie retailer by market share, according to Bloomberg Intelligence. There are more opportunities in beauty and fragrance, not to mention athletic apparel.

A full sale would have been cleaner than a partial one and more helpful to L Brands’ roughly $4 billion of net debt. But retaining a minority stake allows it to share in any potential upside. What’s more, its continued presence should help prevent Victoria’s Secret from alienating its core customers as it rejuvenates. This is a delicate balance that must be managed. But the new owner must also have the freedom to make the necessary but painful changes. At least it will be able to do so away from the scrutiny of quarterly earnings.

In the meantime, the deal will leave L Brands focused on Bath & Body Works, the seller of candles, home fragrances and body care products, which has been thriving.

Assuming roughly $1 billion of value from the transaction and Bernstein’s estimate of Bath & Body Works’ enterprise value of $11.4 billion, after subtracting the net debt, the equity would be worth about $8 billion, ahead of the market capitalization of $6.8 billion as of Wednesday’s close. The shares have risen about 35% so far this year.

But there is a risk that Bath & Body Works won’t be able to sustain its stellar sales growth, given that its 1,700 stores are not immune from the pressures on malls. At least without the drain of Victoria’s Secret, L Brands should have more capacity to ensure this division doesn’t lose its eucalyptus-scented way. — Bloomberg

Malaysia to implement B30 biodiesel mandate in transport sector before 2025

KUALA LUMPUR — Malaysia will implement a B30 biodiesel program in the transport sector by 2025 or even earlier, Prime Minister Mahathir Mohamad said on Friday at the launch of the country’s National Automotive Policy plan.

The policy will provide supporting measures including the development of testing and research standards to facilitate the adoption of biodiesel with a 30% palm oil content, Mahathir said.

Malaysia’s primary industries ministry has previously said it plans to test a B30 program in June. — Reuters

Dashboard (02/24/20)

Toyota Motor Philippines welcomes new president

TOYOTA MOTOR Philippines Corporation (TMP) formally introduced Atsuhiro Okamoto as its incoming president in a ceremonies witnessed by members of the business community and the media at the Grand Hyatt Manila. The event highlighted TMP’s successes in the past four years under the leadership of president Satoru Suzuki, and presented a glimpse of how Toyota will transform into a mobility company, which aims to improve people’s daily lives through various mobility solutions.

Suzuki left the helm on a high note with TMP’s achievement of record-breaking market share of 39.5% and 18th consecutive Triple Crown by end-2019. TMP’s business also grew with the introduction of new Toyota models and the expansion of its distribution network nationwide, with additional 23 dealers, to better serve the needs of the market. In his farewell speech, Suzuki thanked Toyota customers who put their trust in the brand, saying, “You are the reason for Toyota’s passion to be always better.”

For his part, TMP Chairman Alfred V. Ty thanked stakeholders for their support to Toyota’s business in the Philippines for over 30 years. Ty underscored Toyota’s sustained commitment to nation building, especially through local automotive manufacturing. “Because of your unwavering support and friendship, we have been able to remain true to our promise of service to the Filipino and the Philippine nation,” Ty said. In his message, Ty highlighted TMP’s investments under the Government’s Comprehensive Automotive Resurgence Strategy or CARS program, which already reached P5.42 billion, enabling transfer of technology, employment generation and skills development, among others. Ty also thanked the government for the CARS because it gave Toyota an indispensable role in enhancing the industrial and manufacturing capability of the country.

Globally, Toyota is transforming into a mobility company, stemming from Toyota Motor Corporation President Akio Toyoda’s direction. Toyota’s concept of the automobile is said to continue to change in the current era of innovations, particularly in terms of connectivity, automation, shared mobility, and electrification.

With such new technologies, Toyota aims to develop communities that are not just centered on “cars” but on “people.” In the Philippines, where the population is huge and the economy is fast-growing, mobility needs will continue to evolve and become vital to socioeconomic development.

Leading TMP’s path towards offering new mobility solutions is incoming TMP President Atsuhiro Okamato. “As TMP’s new president, I would like to reiterate to all TMP team members, dealers and suppliers alike, the importance of dedicating our work to contribute to society. We will continuously do so by providing ever better cars and services to enhance the quality of life of Filipinos.” Okamoto said in his speech.

A graduate of Keio University, Okamoto started his career at Toyota Motor Corporation in 1992. He has gained a rich marketing experience handling Toyota and Lexus brands in the past 28 years. His former assignment as executive vice-president of Toyota Motor Asia Pacific, likewise, gave him a closer understanding of the ASEAN market and the Philippines.

The Porsche Taycan is touted as the world’s first fully electric sports car.

Porsche sales up 10% in 2019

STUTTGART-HEADQUARTERED car maker Porsche registered a 10% increase in sales last year compared to 2018 figures, selling 280,800 vehicles worldwide.

The performance was largely a result of the strong sales of the Porsche Cayenne and Macan sport utility vehicles. The Cayenne, made available last year in a sportier form called the Cayenne Coupé, moved 29% more vehicles last year (92,055 units in total) than the previous year. For its part, the Macan emerged as Porsche’s best-selling model with worldwide deliveries of 99,944 units, a 16% increase versus 2018.

Said Detlev von Platen, board member for sales and marketing at Porsche AG, “We are pleased with this strong result, which shows the worldwide customer enthusiasm for our sports cars, and are also proud that we have further strengthened the radiance of our brand and the customer experience with new approaches.”

The executive added that Porsche is “optimistic” it can “maintain the high demand in 2020,” citing the company’s planned introduction of new models, as well as the “full order books for the Taycan.”

The all-new Porsche Taycan is the world’s first fully electric sports car already into volume production. There are three versions of the four-door model available: Taycan Turbo S, Taycan Turbo and Taycan 4S. The first batch of vehicles is set to arrive in the first half of the year in markets across the globe, including the Philippines.

Last year, Porsche saw its strongest growth pace in its home market of Germany, as well as in Europe as a whole, where sales of its models rose 15%. A total of 31,618 units were sold in Germany and 88,975 units in combined European markets during a 12-month period.

Mirroring this uptrend was the pace of sales in China and the US, two of Porsche’s largest markets in terms of volume. It registered an eight-percent increase there, “defying a slump in these economies,” according to a Porsche release. The car maker sold 86,752 units in China and 61,568 units in the US.

Porsche deliveries in Asia-Pacific, Africa, and the Middle East totaled 116,458 vehicles, up seven percent over 2018.

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