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Three-year T-bonds likely to fetch lower rates

TREASURY BONDS (T-bonds) on offer on Tuesday will likely fetch lower rates as the market awaits the central bank’s move on interest rates after the release of latest inflation data.

The Bureau of the Treasury (BTr) is offering on Tuesday P20 billion worth of reissued three-year T-bonds with a remaining life of two years and six months.

For Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., the yields on the tenor on offer tomorrow may move within the 3.6%-3.8% range.

On Oct. 1, the BTr borrowed P20 billion as planned from three-year bonds out of bids totaling P50.8 billion. The three-year papers fetched an average rate of 3.996%, 3.5 basis points (bps) higher than the 3.961% quoted when the tenor was offered on Aug. 27.

“The markets will anticipate the next BSP (Bangko Sentral ng Pilipinas) monetary policy-setting meeting on Dec. 12, 2019 for a possible cut in local policy rates that cannot be completely ruled out amid relatively low/benign inflation that is still well below the 2%-4% target,” Mr. Ricafort said via text message.

The three-year bonds were quoted at 3.922% at the secondary market on Friday, based on the PHP Bloomberg Valuation Service Reference Rates.

Inflation picked up to 1.3% in November due to higher prices in some commodity groups. Last month’s print was higher than the 0.8% recorded in the preceding month as well as the 1.2% median estimate in BusinessWorld’s poll of 16 economists.

Year-to-date, inflation averaged at 2.5% which is still within the 2-4% target range set by the BSP for 2019.

BSP Governor Benjamin E. Diokno earlier said the Monetary Board will watch out for November inflation data during its eighth and last policy-setting meeting on Thursday, Dec. 12.

ING Bank NV Manila Branch Senior Economist Nicholas Antonio T. Mapa expects the auction to be met with strong demand from the liquidity released after the banks’ reserve requirement ratio (RRR) cut took effect this month.

This may even prompt the Treasury to open its tap facility to accommodate oversubscription, he said.

“BSP recently released a fresh P100 billion in liquidity from a RRR reduction and this could help drive the government securities market rally for the time being as funds stay away from bank loans for the time being,” Mr. Mapa said.

“However, an offsetting factor would be some seasonal increase in short-dated local interest rates, or some premium for crossing-the-year peso funds/deposits/borrowings amid some window-dressing activities in view of the accounting yearend,” RCBC’s Mr. Ricafort added.

The RRR for universal and commercial lenders now stands at 14% and four percent for thrift banks following 400 bps worth of cuts for the year thus far, while the reserve ratio of nonbank financial institutions with quasi-banking functions is at 14%. Meanwhile, the RRR of rural banks is at three percent.

The Treasury has set a P220 billion borrowing program this quarter for the local market, broken down into P100 billion in Treasury bills and P120 billion via Treasury bonds. — B.M. Laforga

Suzuki PH inaugurates 77th dealership in Ilocos Norte

ADVANCING its commitment to deliver top-quality products and services to more Filipinos, Suzuki Philippines (SPH), the country’s pioneer compact car distributor, expands its reach in the northern part of the country with a new 3S dealership in Ilocos Norte.

Suzuki Auto Ilocos Norte is Suzuki’s 77th dealership nationwide and the 13th dealership under the supervision of Grand Canyon Multi-holdings, Inc., which has recently held a groundbreaking ceremony for the Suzuki Auto Tagum targeted to open by 2020.

Besides strengthening its presence in North Luzon, the new Suzuki dealership aims to engage in the local business and culture of our fellow Ilocanos and contribute to further growing the livelihood industry of Ilocos region by providing convenient and accessible car dealership with variety of vehicles that suit the locales’ commercial and passenger vehicle needs.

“Continuing our business momentum this year, we are very pleased to prove to our Filipino market our commitment to bring Suzuki vehicles to more locations nationwide. We have made it easier and more accessible for more Ilocanos to experience the Suzuki Way of Life through our award-winning and engineered-for-excellence Suzuki vehicles. We are excited to see them in the new Suzuki Auto Ilocos Norte,” shared SPH Director and General Manager for Automobile Division Keiichi Suzuki.

Suzuki Auto Ilocos Norte is located at Barangay 16, San Nicolas. All well-loved Suzuki vehicles, including the recently launched All-New Carry together with the New Vitara, All-New Jimny, Suzuki Swift, Dzire, and the All-New Ertiga, will be available at Suzuki Auto Ilocos Norte.

“Aside from our firm belief in and reliance on Suzuki and its vehicles, we see a strong potential in Ilocos Norte to contribute to local economic progress not just as a tourist district but also, and more importantly, as a promising business zone,” shared Grand Canyon Chairman Peter Po.

With the back-to-back dealership inaugurations and groundbreakings this year, SPH is optimistic about being able to share the Suzuki Way of Life with more Filipinos and taking a more active role in driving growth in the local automotive industry.

For more information about Suzuki visit http://suzuki.com.ph/auto/, like it on https://twitter.com/SuzukiAutoPH and follow on Instagram at @suzukiautoph.

PSALM targets to finalize privatization structure of two power plants by 2020

STATE-LED Power Sector Assets and Liabilities Management Corp. (PSALM) is targeting to complete next year the privatization structure for two power plants through the consultancy assistance of the Asian Development Bank (ABD), its president said.

“Hopefully by next year, we will be able to decide on the privatization structure,” PSALM President and Chief Executive Officer Irene Joy B. Garcia told reporters about the remaining facilities under the company, which was created by law to sell government energy assets.

She identified these as Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plants, and the Casecnan multi-purpose project.

“The power plants, they have different structures. We are seeking the assistance of ADB to look at the technicalities of that,” she said, adding CBK will be privatized first.

Ms. Garcia said the need to first come up with a privatization structure through a study by the ADB is because of Casecnan’s ownership structure.

She said government agencies National Irrigation Administration (NIA) and National Power Corp. (Napocor) have an agreement to transfer the latter’s 60% stake in the project to PSALM as called for under Republic Act No. 9136, the Electric Power Industry Reform Act (EPIRA) of 2001.

“Obviously, we need to carve out that 60%. So how do you carve it out? How do you divide the assets? Is it going to be an identification of what are the irrigation assets and what are the power assets?” she said.

She said the agreement between NIA and Napocor does not provide implementing provisions how to divide the 60-40.

Based PSALM’s website, Casecnan is contracted to CE Casecnan Water and Energy Co., Inc. as its independent power producer administrator (IPPA) until April 5, 2022. IPPAs are qualified private sector entities that manage the output from the contracts that Napocor entered into with the independent power producers.

For CBK, Ms. Garcia said ideally the agency wants a single buyer for the power plants. CBK is operated by CBK Power Co. under an IPPA contract until Feb. 7, 2026. IPPAs are appointed through public biddings conducted by PSALM. They gain an opportunity to trade in the wholesale electricity spot market without the expense of building a new plant.

“We are fine-tuning the scope of the coverage of the study of ADB, so that by next year they can start the study,” she said. “I’m not very certain how much time they need, but I’m thinking [that’s about] six months before they come up with the study.” — Victor V. Saulon

Yields on gov’t debt end flat on BSP rate bets

By Carmina Angelica V. Olano
Researcher

YIELDS ON government securities (GS) traded at the secondary market remained flat last week amid mixed expectations on whether the central bank will cut rates or not as the November inflation print picked up last week.

Debt yields went down at an average 3.3 basis points (bps) week on week, according to PHP Bloomberg Valuation (BVAL) Service Reference Rates published on the Philippine Dealing System’s website on Dec. 6.

“The drop in yields was a result of expectations of a rate cut…[Even] as the November inflation was slightly above consensus, year-to-date inflation was still within the Bangko Sentral ng Pilipinas’ (BSP) range. This fuels hopes that the government will consider doing another round of rate cut,” First Metro Asset Management, Inc. said in an e-mail.

For Jonathan L. Ravelas, chief market strategist at BDO Unibank, Inc., most yields moved sideways to down last week, but the downside was “limited.”

He noted that on Nov. 25, BSP Governor Benjamin E. Diokno hinted that a rate cut is still possible this year.

“These recent statements opened the doors for an expansion. [This is why] yields slightly went down [last week]. But with inflation printed higher…[traders] were on a wait-and-see attitude,” he said.

“The increase from 0.8% in October to 1.3% in November is quite fast. So, baka hindi na sila mag cut. (So, the BSP might decide not to cut rates anymore),” he added.

On the sidelines of the Financial Education Stakeholders Expo at SMX Convention Center in Pasay City on Nov. 25, Mr. Diokno hinted that the Monetary Board (MB) could still slash benchmark interest rates anew in their eighth and last policy review for the year on Dec. 12. if conditions warrant further easing this soon beyond the 75 bps in total cuts done so far this year.

“The BSP will always be data-dependent so we will evaluate…every time we have a policy meeting,” he told reporters.

Last week, the Philippine Statistics Authority (PSA) reported that November headline inflation rate was up from 0.8% in October, albeit slower than the six-percent inflation rate posted in November 2018.

The overall rise in prices of widely used goods averaged 2.5% in the 11 months to November, which came out higher than the BSP’s 2.4% forecast, but still within its 2-4% target range for 2019.

At the secondary market last Friday, the 182- and 364-day Treasury bills (T-bills) dropped by 2.6 bps and 3.8 bps, respectively, to fetch 3.345% and 3.472%. On the other hand, the 91-day debt paper inched up by 0.1 bp, yielding 3.179%.

Rates at the belly and long end of the yield curve fell across the board. The rates on the two-, three-, four-, five- and seven-year Treasury bonds (T-bonds) declined by 0.2 bp (3.789%), 1.9 bps (3.922%), 3.2 bps (4.067%), 3.8 bps (4.218%), and 4.2 bps (4.473%).

The 10-, 20-, and 25-year T-bonds saw its yields went down by 5.7 bps, 5.2 bps, and 6.2 bps, respectively, to 4.684%, 5.231%, and 5.236%.

For this week, FAMI said, “We expect the yield curve to trade sideways to slight upward bias as traders await the result of the BSP Monetary Board Meeting on Thursday.”

For BDO’s Mr. Ravelas, he expects yields to go sideways to down.

“Between [last Friday and this] Thursday, most likely yields will move sideways. If expectations of another rate cut persist, these will go down,” he said.

In terms of the possibility of another rate cut, Mr. Ravelas, however, mentioned that the central bank will “most likely…wait for another inflation print to see if there is a need to cut rates.”

The PSA’s December inflation report is expected to be released in January 2020.

Dongfeng opens Isabela dealership

PILIPINAS AUTOGROUP, Inc. (PAI) announced recently the opening of its Dongfeng Isabela showroom and service center. Auto Ten Trade and Services owns and operates the Dongfeng Isabela dealership located at Barangay Taringsing, Cordon, Isabela.

“This is the second Dongfeng dealership of Pilipinas Autogroup, Inc. to be established and this is exactly in line with the statement made a month ago by our chairman, Mr. David Coyukiat. We entered the market of Isabela as we recognize a lot of potential growth as business in this area is booming. From construction, hauling, and transport needs, Dongfeng trucks will provide quality vehicles backed up by after sales support. Four more outlets will be soft-launched in the coming weeks to cover strategic high traffic locations,” revealed Cresencio Fernandez Jr., president of Pilipinas Autogroup, Inc.

Present during the soft launch and blessing were (from left to right): Ruben Ronquillo Jr., Sales Director of PAI; Julie Zuniega; Fr. Patrick Caro; Neil Carlo Federizo, GM of Auto Ten Trade and Services; Nicomedes Federizo; Efren Malupeng, Municipal Administrator of the municipality of Cordon; Jun Deri — consultant for Auto Ten Trade and Services; and Ramil Mendoza, Division Head of Technical and Engineering at PAI.

Financial compensation expected to encourage ASF self-reporting

THE Department of Agriculture (DA) said it will offer financial assistance to hog farmers who file early reports about possible African Swine Fever (ASF) outbreaks in their herds, to reduce the possibility of diseased pigs making it to market.

“Para ma-encourage iyong mga backyard hog raisers to report immediately to authorities kung may sakit na ‘yung mga baboy nila at huwag na nilang ibenta iyong may mga sakit sa mga hog trader (This is to encourage backyard hog raisers to report diseased hogs immediately to authorities, and to not sell these to hog traders),” Agriculture Secretary William D. Dar said in a text message.

Memorandum Order no. 32, series of 2019, signed by Mr. Dar on Dec. 2, calls for “farmers affected by government-organized culling operations (to be provided) financial assistance in cash and/or credit in order to ease the production and financial losses incurred by the farmers.”

The DA will make the payouts from a special account to be initially provided P250 million by the Department of Budget and Management (DBM).

The assistant secretary for livestock and the Bureau of Animal Industry (BAI) have been ordered to draft a Compensation Procedure Manual for approval by the Secretary.

In its report to the World Organization for Animal Health on Nov. 4, the BAI tallied 40,480 affected pigs all over Luzon, including Bulacan, Pampanga, Nueva Ecija, Rizal, Cavite, Pangasinan, and Metro Manila. Of this total, 177 died from ASF, while 40,303 were culled and disposed of.

Compensation will not cover losses related to contaminated feeds, disinfection of plants and equipment and other control measures, restocking costs, economic losses due to unfavorable market conditions, and improvement of biosecurity measures. Rates will also be adjusted from time to time by the Agriculture secretary through an Administrative Order. — Vincent Mariel P. Galang

From waste to high taste

WE KNOW that the planet is in bad shape when even luxury brands are taking a stand. Oceans rise, empires fall; but people will always shell out a little more for something special. In 2018, Chanel announced that it would no longer use exotic skins, which would include crocodile, lizard, snake, stingray, and fur. As part of its efforts to make responsible fashion, Chanel unveiled a gold boater hat earlier this year, using a faux leather called Piñatex, derived from pineapple fibers — from the Philippines, no less.

BusinessWorld caught up with Ananas-Anam Philippines CEO Chuck Lazaro last week at the 2nd Philippine Garment Leather Industries and Textile Expo in Pasay City. Ananas-Anam Philippines exists as a subsidiary of Ananas-Anam in the UK, founded by Dr. Carmen Hijosa. Dr. Hijosa, from Spain, worked closely with the Design Center of the Philippines. “She’s been familiar with all the natural fibers we have: including abaca, banana, and even pineapple,” said Mr. Lazaro, who met her during this period; himself working with abaca textiles. “She said that leather production is one of the most polluting industries in the world.”

The production of leather takes a toll on the planet, the animals, and its makers. Huge amounts of land are used to raise livestock: leather is often a byproduct of the meat industry. Water and feed also contribute to that mess, taking away resources from other people. The animal is killed for its skin, raising ethical questions about killing something sentient and sensitive for one’s own gain. The load is then transferred to workers in the leather industry, who have to face dangerous chemicals and heavy metals like chromium. The massive toxic waste generated by all these steps, of course, will find a way to come back to haunt us.

Dr. Hijosa presented her pineapple fiber-based product at the PhD graduate exhibition at the Royal College of Art, London about six years ago, according to Mr. Lazaro’s account. The textile defeats all the points cited above: it uses pineapple leaves, a waste product from pineapple plantations (they only need the fruit). The leaves are processed by enzymes, not chemicals, to remove their sap. Mr. Lazaro noted that in the old days, such as in the production of piña fabric used for formalwear, the fibers were processed using caustic soda or peroxide. “Sakit sa mata (they made the eyes hurt),” he said. But not anymore. The fibers are then made into a sturdy mesh, with a coating that resembles leather in look and feel. It’s 90% biodegradable (the resin that goes into the coating makes up the nonbiodegradable component), and is completely cruelty-free.

That’s great, but as we’ve noted above, part of the problem of the leather industry is also how it treats its people: exposed to chemicals, they often fall ill with respiratory and skin ailments, not to mention the sheer toil in the factories. When asked if Piñatex is also ethically sourced, Mr. Lazaro said that they pay fair trade prices for the leaves — which are usually just burned otherwise. “In a way, it’s helped them a little bit,” he notes, referring to the pineapple farmers. The goal, however, is to place the Piñatex factories in the pineapple farms. “Let them own the business, with us managing them,” he said. The leaves are gathered from pineapple communities in Camarines Norte and Sur, Laguna, Cavite, and some parts of Mindanao.

As we’ve noted, Chanel has used Piñatex in its creations, and so have the brands Hugo Boss (releasing a line of shoes), Puma, and Adidas. What once started as a waste product from a somewhere in the Philippines has now hit the shelves of some of the world’s biggest brands and it’s strange that Piñatex, at present, has not yet made as big an impact in the Philippine garment industry.

Mr. Lazaro said, “It’s sayang (a waste) that it’s just them using it. It’s so scarce, and it’s expensive,” he admits. “We’ve got to lower the price, but to lower the price, I’ve got to find ways to make my process easier.” He said that their volume goal for this year was 3,000 meters a month.

As the planet changes for the worse, we are given the imperative to change for the better. Asked if he ever sees Piñatex replacing animal leather, he said, “No. I don’t see it. Maybe they’ll do something about the way they produce it (leather). I believe there’s a way. I believe there [will be] certain technology that will omit all these issues that leather is causing.” — Joseph L. Garcia

San Miguel proposes to extend MRT-7 to Bocaue, Bulacan

SAN MIGUEL CORP. (SMC) is proposing to extend the Metro Rail Transit Line 7 (MRT-7), which is currently under construction, to Bocaue, Bulacan.

SMC President and Chief Operating Officer Ramon S. Ang said the company has already submitted the proposal to Department of Transportation (DoTr) to extend P62.7-billion MRT-7, which will run from North Avenue in Quezon City to San Jose del Monte City in Bulacan.

“Na-submit na a month ago or something (It was submitted a month ago),” Mr. Ang told reporters on Dec. 1. “Kung bigyan… nila ng extension ngayon, ngayon pa lang pwede na nating simulang trabahuin ‘yung going to Bocaue (If they will give the extension now, we start on extending the project to Bocaue).”

Mr. Ang said SMC is willing to advance the funds for right-of-way (ROW) acquisition. “Kami ang mag-aadvance sa pagbili ng right-of-way, lahat. Kami na lahat (We will advance the money for right-of-way, everything. We will do everything).”

SMC is the proponent of the MRT-7 project , which “involves the financing, design, construction, operation and maintenance of the 23-kilometer elevated railway line with 14 stations from San Jose Del Monte, Bulacan to MRT 3 North Avenue in Quezon City and the 22-kilometer asphalt road from Bocaue Interchange of the North Luzon Expressway (NLEX) to the intermodal terminal in Tala.”

The road component will divert northern provincial buses operation to San Jose Del Monte, as a way to decongest EDSA.

Once operational, the MRT-7 is expected to accommodate an estimated 300,000-850,000 passengers a day, according to the DoTr.

The project was 49.15% complete as of October, the DoTr said. — Arjay L. Balinbin

Peso may strengthen on trade data, BSP decision

THE PESO may strengthen this week as the market awaits the release of local trade data as well as the possibility of a final round of easing at the central bank’s last policy meeting for this year, which happens this week.

The local unit closed at P50.765 against the greenback on Friday, gaining 3.5 centavos from the P50.80 per dollar finish on Thursday, according to data from the Bankers Association of the Philippines.

Week-on-week, it strengthened by 4.5 centavos against its 50.81-a-dollar close on Nov. 29.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael L. Ricafort noted that Friday’s close was the local unit’s strongest in more than a week and also among its best showing in 22 months.

“The peso closed stronger…after the US dollar corrected lower versus major global currencies recently after improved global risk appetite amid renewed optimism about a partial phase one US-China trade deal,” Mr. Ricafort said in a text message on Friday.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a text message that the peso moved “sideways with the market waiting for major factors.”

Reuters reported on Friday the White House’s National Economic Council Director Larry Kudlow said the Dec. 15 deadline for a new round of US tariffs on a set of Chinese consumer goods is still on the table.

However, Mr. Kudlow said that President Donald J. Trump likes the current progress of their trade talks with China.

“There’s no arbitrary deadline here … but that fact remains Dec. 15 is a very important date with respect to a no-go or go-on tariffs,” Mr. Kudlow told CNBC as reported by Reuters.

Meanwhile, China has also said on Friday that it will waive import tariffs for some US products such as soybeans and pork shipments, which implied a more positive tone in the financial market sentiment regarding the trade talks.

For this week, analysts said factors that may affect trading will include local data as well as the eighth and last policy meeting of the central bank’s Monetary Board for 2019.

“[This] week may provide significant movement as major trade data comes out,” Mr. Asuncion said.

“The markets will anticipate the next BSP (Bangko Sentral ng Pilipinas) monetary policy-setting meeting on Dec. 12 for a possible cut in local policy rates that cannot be completely ruled out amid relatively low inflation that is still well below the 2-4% target,” Mr. Ricafort said.

Latest data from the Philippine Statistics Authority showed the country’s September trade gap plummeted from a year ago as a bigger decline in merchandise imports tempered the impact of the first drop in six months for foreign sales of Philippine goods.

Merchandise exports slipped by 2.6% to $5.898 billion in September — the first time in six months that sales abroad of local goods declined — while imports dropped for the sixth month in a row by 10.5% to $9.017 billion.

That made the trade deficit narrow by 22.5% to $3.119 billion in September.

The PSA is set to release latest trade deficit data on Dec. 10.

Meanwhile, the Monetary Board will have its last meeting for 2019 on Dec. 12, where they will decide if they will implement another rate cut or hold policy rates.

“BSP’s Monetary Board will consider new data and potential risks at its meeting next week on Dec. 12, 2019,” BSP Governor Benjamin E. Diokno said in a tweet after the PSA reported that November inflation picked up to 1.3% from 0.8% in October.

Mr. Ricafort sees the peso moving within 50.55-50.95 this week, while UnionBank’s Mr. Asuncion thinks the peso will fare around the P50.60-50.90 band. — L.W.T. Noble with Reuters

A year of recovering lost momentum

VEHICLE SALES are often taken as an effective indicator of a country’s economic health. This is because new car sales are a sign of consumer economic confidence, that more Filipinos are willing to commit to lease or loan payments for years into the future.

For most of the decade, it was going well for the Philippine automotive industry. Things hit a speedbump in 2018, however, when vehicle sales dropped for the first time in seven years as the industry reeled amid imposition of higher automobile taxes under the Tax Reform for Acceleration and Inclusion Law, and the acceleration of headline inflation to the highest in recent history.

A joint report of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) showed that total sales last year fell 16% to 357,410 units from 425,673 vehicles in 2017, the first drop for the country since 2011 when vehicle sales also dropped by 16% to 141,616 units.

So 2019 is shaping up to be a critical year to see whether the country’s automotive sector can pick its momentum back up, or whether it is seeing the start of a downtrend.

LOOKING BACK ON 2019
Credit and market intelligence experts Fitch Solutions predicted that 2019 would see a mild recovery, as it forecast sales to rise by 3.2% to 120,000 units in a report published in December 2018.

“While we expect households and businesses will have adjusted to the higher vehicle excise taxes imposed under the Philippines’ Tax Reform for Acceleration and Inclusion (TRAIN) Law in 2019, we believe that unfavorable economic conditions in the form of high interest rates, elevated inflation, and a still weak peso will see car sales remain under pressure,” Fitch had said.

The firm added that over the full 2019-2027 forecast period, passenger car sales in the Philippines will average annual growth of 6.5%, to around 205,000 units by the end of 2027.

It did not get off to a great start, as vehicle sales slid 15% in January from 2018 due to industry-wide reductions across different categories, according to CAMPI and TMA’s joint data. Total sales for the first month of this year fell to 26,888 units from 31,645 sold in January 2018, and all segments from passenger cars to commercial vehicles saw double-digit drops in sales.

However, automotive sales have been steadily growing since then, except for a seasonal dip in August. In October, based on the latest available data released by CAMPI and TMA, the industry saw continued recovery and recorded its “highest monthly sales” so far this year.

Data jointly released by the groups showed that overall sales rose 3.8% to 34,397 units in October from 33,150 vehicles in the same month last year, and by 8.1% from 31,820 units sold in September.

CAMPI President Rommel R. Gutierrez described the latest growth clip as a “much-needed boost” for the industry to hit its target for the year. “The current market demand for vehicles along with creative and aggressive sales promotion efforts give us a positive outlook as we aim to sustain the growth trend for the remaining months of the year,” he said in a statement. “We remain positive that our industry target for the end of the year will be achieved as all brands remain committed to providing innovative mobility solutions to the Filipino people.”

Mr. Gutierrez last year projected a 10% sales growth for full-year 2019. Year-to-date, both groups have so far sold 301,761 units, 2.53% more than the 294,311 vehicles sold in 2018.

Broken down, this year’s October sales of passenger cars saw a 6.8% bump to 10,083 vehicles from 9,444 a year earlier. Commercial vehicles — which accounted for 70.69% of the total — went up by 2.6% to 24,314 units from 23,706 a year earlier. Asian Utility Vehicle sales jumped 40.2% to 4,780 vehicles from 3,409 units, while light commercial vehicle sales slipped 3.3% to 18,271 vehicles from 18,896 units.

Year-to-date, commercial vehicle sales went up 3.8% to 211,361 units, while passenger car sales dropped 0.2% to 90,400 units.

Toyota Motors Philippines Corp. (TMP) remained the industry’s biggest player with 47.69% of market share, selling 16,403 vehicles in October or 9.9% more than the 14,927 units sold a year ago. Mitsubishi Motors Philippines Corp. followed with a 16.01% market share, even as sales dropped by 8.3% to 5,508 units from 6,004 a year ago.

Nissan Philippines held the third spot with 10.75% market share as vehicle slipped 0.2% to 3,697 in October from 3,703, while Suzuki Philippines Inc. followed with a 6.41% market share, growing sales by 11.8% to 2,206 units from 1,974.

Ford Motor Company Phils. Inc. followed with 4.78% market share, with sales up 1.1% to 1,643 from 1,625.

However, even as TMP retained the top spot, the company revealed that it was not confident it will achieve its annual sales target of 165,000 units.

A month earlier in September, TMP President Satoru Suzuki told the media that he is not confident about reaching the annual car sales target due to challenges still present in the country’s economic environment.

TMP First Vice President Rommel Gutierrez, however, added that sales might pick up in the tail end of the year, as this is usually when consumers are most confident about spending.

The same positive outlook seems to gain some bearing among other players in the industry.

Hyundai Asia Resources, Inc. (HARI), the official distributor of Hyundai vehicles in the Philippines, while it reported a six percent drop in sales in the first 10 months of 2019, remains confident in the company’s performance in the coming months.

“While we don’t compete in some segments of the market (e.g. pick-ups), our volumes remain strong, underpinned by the quality of our vehicles and our focus on excellent after-sales services. Our models per segment remain competitive and this bodes well for the Hyundai brand in the Philippines,” HARI President and CEO Ma. Fe Perez-Agudo said.

Most of the company’s commercial vehicle sales are led by Hyundai buses such as Hyundai County, but after the recent rollout of its Class 2 Modern Jeepney, HARI is optimistic.

“With the transport department’s support and high demand from transport cooperatives, our modern jeepneys will contribute to our growth over the medium-term. We are excited to give Filipino commuters the new King of the Road,” Ms. Perez-Agudo said.

“Combined with the acceleration of the government’s infrastructure projects, our CV business is poised to expand and provide fresh avenues of growth,” she said. — Bjorn Biel M. Beltran

Initial shipment of frozen Davao durian enters US market

DURIAN FROM Davao City has broken through the US market with an initial 300 kilos ordered by an Oregon-based blogger and importer.

Candelario B. Miculob, chair of the Davao City Durian Industry Council, said the buyer, Lindsey Gasik, has been travelling around Asia tasting different durian varieties.

She expressed interest in importing vacuum-packed frozen durian from the city earlier this year.

Mr. Miculob said this partnership is “some kind of a breakthrough” that could prompt more exports to the US and other markets such as Europe.

“It’s not easy to enter the US market. In fact, you have to pass the strict requirements. We submitted documents, but since we have our facility and we already have been exporting to Japan, it was easy for us,” he told the media in a forum last week.

Products from the processing facility, which also handles other fruits like marang and lanzones, are also being exported to Singapore.

Mr. Miculob said each pack of 300 grams is priced at $69 for the US market.

“This (US) is a permanent market and the delivery depends on the level of the inventory,” he said.

“The challenge that we have now is maintaining the quality of our durian,” he added.

Durian producers are also awaiting a bilateral agreement between the Philippines and China that would include protocols for products such as frozen fruit.

“We are still waiting for the signing of the bilateral agreement for us to penetrate China. We have been asking for help from the national government and even the Consul General of the Philippines to China to fast-track the bilateral trade agreement,” he said. — Maya M. Padillo and Carmelito Q. Francisco

Luck, perseverance, and a good product

One Earth Organics has launched a line of serums to mix and match according to the user’s needs.

DIANA VREELAND once said: “Luck is infatuated with the efficient.” Tyffanie Short, CEO and founder of One Earth Organics, seems to have luck on her side, and the beauty products she sells (and uses), hide all the hard work that went into propelling the brand from Instagram to Beauty Bar and Watsons.

BusinessWorld attended the launch of One Earth’s Beauty Blends 5D last month in BGC. Beauty Blends 5D is a series of serums that one can mix and match according to their needs. The series includes Radiance (designed for intense brightening, made with grape extract, beta glucan, magnesium ascorbyl phosphate, and hyaluronic acid); Eternal (to combat aging, made with vitamins C and E); Clarity (exfoliation multitasker); Renascence (plumping and peeling), and Purity (ultra-hydration). The whole set costs P1,895, with each priced at P429.

Ms. Short’s products, according to her, use all-natural and organic ingredients. “It’s more potent.” Furthermore, the fact that she uses organic ingredients minimizes her environmental impact. She also engages in fair-trade purposes for her local ingredients, such as organic coconut oil.

It took four years for Ms. Short to launch this product, as she had been busy building the brand and letting the items hit shelves. The Filipino brand has some status via its selling activities on Facebook and Instagram, but that wasn’t enough for Ms. Short. “When you start online, people would always question your credibility.”

Ms. Short created the product in 2012, starting with an underarm kit — which includes a spray, a serum, and a cream — which she said began with her own insecurities with her underarms. In addition to that, she said that she suffered from psoriasis. Frustration with the products in the market for her sensitive skin led her to research on plant-based skincare ingredients. “I didn’t have a college degree,” she said.

Armed with an idea, she approached a friend who just so happened to have a laboratory and together, they developed the products. In the earlier part of the decade, she sold her skincare products online, as we mentioned; but also worked the bazaar circuit.

“The bazaars were a huge thing already for me.” In 2017, One Earth began to be stocked on SSI’s Beauty Bar shelves. Asked how she did it, she said, “It wasn’t easy. Beauty Bar was known to have all imported brands. When we got in, we were just the third local brand.”

She talked about the two months of preparation just to get to pitch their product, and the additional five months of preparation and negotiation to finally get them on the shelves. This helped them get to Watsons, which they only entered this year.

While it took them only a month to make their pitch this time (she said that their presence in Beauty Bar helped), six months went into the preparation and negotiation.

“Luck, prayers — we literally just went there, tried our luck, and presented,” she said — making the whole process sound simple (obviously, it was not).

Ms. Short mentioned being a single teenage mom at one point during the interview, and we’ve mentioned her lack of a college degree. That kind of story doesn’t usually end well in this country, but there she was at her launch, in one of this city’s skyscrapers, surrounded by friends and guests, and shelves and shelves of her beauty products.

“It started from my own insecurities. I just thought that I could help other women.” — Joseph L. Garcia

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