Home Blog Page 8633

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

MPIC weighed down by Duterte remarks on water firms

By Mark T. Amoguis
Senior Researcher

PRESIDENT Rodrigo R. Duterte’s tirade against Metro Manila’s water concessionaires last week led investors to unload shares of Metro Pacific Investments Corp. (MPIC) as it is the controlling stakeholder of water firm Maynilad Water Services, Inc.

Data from the Philippine Stock Exchange showed 281.16 million MPIC shares worth P1.12 billion were traded from Dec. 2-6, making it the seventh most actively traded issue in the local bourse.

The stock was lower by 14.9% week-on-week to P3.66 per share last Friday, from P4.3 per share. Year-to-date, the stock is down 20.6%.

“The major factor that pushed MPIC’s price downward was the threat of President Duterte to charge Maynilad… with economic sabotage,” said PNB Securities, Inc. President Manuel Antonio G. Lisbona in an e-mail interview last Friday.

On the evening of Dec. 3, Mr. Duterte threatened to file economic sabotage cases against water concessionaires Manila Water Co., Inc. and Maynilad over supposed onerous provisions in their contracts with the government.

His threat followed Ayala-led Manila Water’s disclosure on Nov. 29 that the Permanent Court of Arbitration ordered the Philippine government to pay the company P7.39 billion, among others, for the losses incurred because of the Philippines’ breach of its obligation.

Salvador S. Panelo, chief presidential legal counsel and presidential spokesman, said on Wednesday Mr. Duterte directed the Department of Justice and the Office of the Solicitor General to draft and prepare new contracts favorable to the state.

Maynilad is 52.8% and 25.24% owned by MPIC and DMCI Holdings, Inc., respectively.

It primarily caters to west zone of Metro Manila, which is composed of the cities of Manila (certain portions), Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon as well as cities of Cavite, Bacoor and Imus and the towns of Kawit, Noveleta and Rosario in the province of Cavite.

“Investors sold down MPIC shares pushing the price to below P4.00 on Dec. 4, 2019, a level we have not seen since 2012,” Mr. Lisbona said.

Following Mr. Duterte’s tirade, MPIC shares went down 10.7% to P3.92 per share last Wednesday, a level not seen in more than seven years or since its closing price of P3.80 per share last March 14, 2012.

“The news heavily impacted the water companies,” said AP Securities, Inc. Senior Research Analyst Rachelle C. Cruz in a phone interview last Friday.

“Most likely, this will put more pressure on the earnings of Maynilad as well as MPIC, the parent company. This has affected the sentiment especially MPIC because its portfolio is heavily regulated…” Ms. Cruz added.

In the third quarter, MPIC’s revenues increased by 3.3% to P21.98 billion. This brought the company’s top line for the first nine months to P66.6 billion, an 8.6% year-on-year gain.

Meanwhile, attributable net income in July to September reached P3.7 billion, 4.2% more than last year’s comparable three months. Year to date, it is down 5.5% to P11.8 billion.

Aside from water, MPIC has businesses in power, toll operations, health care, rail, and logistics, among others.

“I think, given that the selloff has already peaked, we might see some rebound especially some investors who might go bargain hunting already,” Ms. Cruz said moving forward.

Ms. Cruz placed the stock’s support and resistance levels at P3.5 and P4, respectively.

PNB Securities’ Mr. Lisbona pegged the stock’s support at P3.5 and resistance at P4.2.

“The situation is so fluid at this point but the odds are that the direction will be more biased downwards,” he said.

MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls.

DBP opens soft loan program for irrigation, water supply projects

DAVAO CITY — Government-run Development Bank of the Philippines (DBP) has opened a soft loan window for local government units (LGUs) as well as cooperatives in Mindanao for water supply systems and irrigation projects.

Rogelio V. Garcia, one of the DBP’s directors, said they will offer credit at an interest rate of 3.5% to 4% per annum, lower than the usual 6.5% to 7%.

Mr. Garcia, speaking at the official launch of the MinDA Water Supply Program Friday, said the payment period will also be more flexible.

“(The) basic length of the loan term of DBP is between seven to 10 years, but we can, of course, make some extension… depending on the project,” he said.

“The water problem that we have in Mindanao… is a problem from long time ago, but nobody gave attention to it… Depending on the application, we can go as much as what is needed,” said Mr. Garcia, who comes from Mindanao.

The program, an initiative of the Mindanao Development Authority (MinDA) and in partnership with the Department of Interior and Local Government (DILG), is intended as a contributing mechanism for economic development, peace, and poverty reduction, especially in remote areas.

Secretary Emmanuel F. Piñol, MinDA chair, said LGUs and cooperatives can pursue the projects as a business venture to “recover their investments” and help pay for the loan.

COMPOSTELA VALLEY
Among the first LGUs to express interest in availing of the program is Compostela Valley province, soon to be officially renamed Davao de Oro, which is now finalizing a P300-million bulk water project that will cover three towns.

Mr. Piñol said he has already discussed the project with Governor Jayvee Tyron L. Uy and MinDA provided the provincial government a P500,000 fund from its savings to draft the feasibility and engineering study.

“ComVal is actually looking at a P300-million loan to provide water to Nabunturan (the capital) and two other towns,” said Mr. Piñol during the program launch.

MinDA and the local government are awaiting a resolution from provincial board that will authorize Mr. Uy to sign the deal.

Mr. Piñol said MinDA is also planning to tap foreign and international development agencies for similar funding programs that will help LGUs, especially those in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).

Among the water-related projects being eyed for the region are desalination facilities in island communities. — Carmelito Q. Francisco and Maya M. Padillo

Steady progress in the automotive industry

AS THE AUTOMOTIVE industry recovered from the challenges of the previous year and have reached stable growth with new and upgraded releases this 2019, insights have further shed light on the activity of carmakers and the choices of the driving public.

Consolidating figures from distributor groups Association of Vehicle Importers and Distributors (AVID), Chamber of Automotive Manufacturers of the Philippines (CAMPI), and Truck Manufacturers Association (TMA), AutoIndustriya.com reported last July that the Philippine automotive industry accumulated a total of 195,057 units sold for the first half of the year.

This meant an improved performance by 1.87% compared to the same period last year, which tallied 191,470 units.

Commercial vehicles — which include car types like sport utility vehicles, light trucks, and bus trucks — still took the large share of the market with 131,708 units. Passenger vehicles, on the other hand, had 63,349 units.

Among the leading players in the market, AutoIndustriya continued, Toyota Motor Philippines remained the top manufacturer with 37.49% of total units sold in the January-to-May period. This was followed by Mitsubishi Motors with 15.68% of the units; Nissan Philippines, Inc. with a 10.8% share; Hyundai Philippines with 9.05%; and Ford Motor Company Philippines, Inc. at 5.76%.

Meanwhile, as the year nearly wraps up, auto sales kept on a positive trend albeit a momentary decline. The sales have been growing since February. However, after recovering in June with a year-on-year increase of 8.7%, the data jointly gathered by CAMPI and TMA recorded a “seasonal” drop of 2.4% (29,599) last August, as reported by BusinessWorld. Sales recovered the following month with a 2.3% y-o-y growth to 31,820 units, as well as a 7.5% increase from total sales in August.

So far, the data continue to reflect a steady growth as overall sales rose by 8.1% to 34,397 units last October.

CAMPI President Rommel R. Gutierrez is optimistic about this sustained growth. “We remain positive that our industry target for the end of the year will be achieved as all brands remain committed to provide innovative mobility solutions to the Filipino people,” he was quoted as saying in a statement.

In relation to innovative solutions, it must have been apparent that connected cars — vehicles that are connected to the Internet through a mobile data stream — have started appealing to the driving market.

“Connectivity has been a key enabler for automakers like Ford to offer greater level of comfort, convenience and safety to car owners,” said Linus Mattson, infotainment supervisor of Ford Asia Pacific, in a report by Newsbytes.ph.

These connected automobiles have expanded their capacities to the point of giving access right at the fingertips of motorists holding their smartphones. And such advancements have come just in time, as recent research by Euromonitor International suggests.

“Strong economic prospects and government policies seeking to boost the performance of the automobile industry have created a positive platform for the further development of in-car entertainment in the Philippines,” the global market research company wrote. “The domestic economy is projected to grow substantially in the coming years thanks to investment from foreign companies and rising government and consumer spending.”

ONLINE SHOPPING AND AUTO LOANS
Aside from the monthly stream of data on car sales, there were further insights regarding the automotive industry mined by local online automotive marketplace AutoDeal in its quarterly Philippine Automotive Industry Report.

The latest release of the report noted the consumers’ “heightened interest in several Chinese brands such as MG, Foton, BAIC, GAC, and JAC.”

“This has been particularly evident in the subcompact crossover segment where models like the MG ZS and the JAC S2 have given more established household brands a run for their money,” Christopher Franks, chief operating officer of AutoDeal, wrote in the report. “With competitive price points, these nameplates have struck at the heart of a segment that is still recovering from a substantial drop in consumer interest following last year’s increase in excise taxes.”

Furthermore, he noted the prominence of online marketplaces as “one of the most valuable research commodities for consumers.”

Analyzing the volume of pages on AutoDeal visited by consumers before making a purchase, the report found out that “consumers with a single interest only navigated to three pages before making a purchase whereby in comparison, consumers who were interested in multiple brands visited 60”.

In terms of leads, the Asian Utility Vehicle & Multi-Purpose Vehicle, subcompact car, and light pick up truck are the leading market segments. Among automakers, Toyota remains the most inquired brand with more than 30% of total inquiries. This was followed by Honda, Mitsubishi, Suzuki, Nissan, Ford, Isuzu, and Hyundai.

Another interesting trend within the year was a finding by India-based market intelligence analysis firm Ken Research about auto loans. The research stated that “it is expected that by the end of 2023, outstanding auto loans in the Philippines could reach P4.7 trillion.”

What makes this spike in loans possible are a mix of factors. An easy access to vehicles through loans offered by banks and dealers have been observed, with streamlined processes in applying for such. Add to that an increase in the middle-class sector who have “higher purchasing power”.

“Credit disbursement will increase as more people become part of the banking system. Both banks and nonbanking institutions are targeting these segments in the most untapped areas, which will result in a steady increase in auto loan disbursements for these segments,” Ken Research was quoted as stating in a report by Visor. — Adrian Paul B. Conoza

PhilMech studying ways to reduce sweet potato harvest losses

THE PHILIPPINE Center for Postharvest Development and Mechanization (PhilMech) said it is studying how to reduce losses in the sweet potato harvest to reduce damage to the produce, which depresses the prices farmers can obtain.

According to a study by the agency, postharvest losses for sweet potato range from 31.21% to about 33% due to “inefficiency of existing manual and labor-intensive harvesting methods.”

“The harvesting operation of sweet potato can be mechanized using an efficient mechanical root crop harvester that can eventually reduce labor requirements and losses on uncollected roots,” PhilMech added.

PhilMech said sweet potato is the seventh most important crop in the world, and the third most important in the Philippines after rice and corn. It is usually planted to tropical and sub-tropical countries, specifically in areas with less productive soil.

A typical harvest requires 30 to 50 workers per day over two days, leading to significant crop damage, lowering the viability of the future crop.

“Harvest losses due to uncollected and mechanically-damaged roots ranged from 15.96 %to 17.94 % of the marketable harvest,” the agency said, adding that other losses are due to the transportation of the harvest from farm to market.

At the farmer level, the average postharvest loss is 16.95% and 0.82% in losses of unharvested crops. At the wholesale level, 3.93% of postharvest losses are due to cleaning and rebagging, which largely eliminates the weight of the peel. At retail, 10.39% of postharvest losses are reported due to spoilage.

PhilMech is evaluating a tractor-drawn device developed by the Philippine Root Crop Research and Training Center at Visayas State University in Leyte and has recommended its commercialization.

According to the Philippine Statistics Authority sweet potato output increased 1.4% to 134,060 metric tons (MT) in the third quarter, with Eastern Visayas accounting for the bulk of production at 35.2% or 47,220 MT. This was followed by Bicol Region (11.3%) and Caraga Region (9.1%). — Vincent Mariel P. Galang

Gender fluid retail: Someday there might not be a menswear department

WHILE gender-free clothing has been on runways and in fashion magazines for years, building a retail space around the concept was until recently seen as financially risky. Now, some companies are out to prove that the cultural fulcrum has shifted enough to give it a try.

According to Pew research, 35% of Generation Z knows someone who identifies as non-binary and prefers gender neutral pronouns — and millennials and even Generation X aren’t far behind. Retailers, and in particular clothes sellers, have taken notice.

“I do believe gender-neutral fashion is the future,” Fashion Institute of Technology Professor Dawnn Karen said. “I feel like we’re moving towards that.”

Holding itself out as the first gender-free store in New York, The Phluid Project in Manhattan’s Soho neighborhood is part of this nascent segment. The space is a combination store, café, and event space geared toward the LGBTQ community.

Phluid Project founder Rob Smith, 54, spent 30 years as a retail executive before opening the store. While Phluid has been up and running a few years now, only recently has the concept of making a commercial go of gender-free clothing spread to bigger corporate retail.

The ascent of Generation Z, Smith explained, is the moving force.

“There is a paradigm shift that is currently happening in our society. An unlearning and a relearning,” Smith said. “By next year, Gen-Z [will account] for one-third of the national population, which accounts for 40% of US spending power. It’s time to change with the times and generations, because their voice and power is undeniable.”

“It became clear to me,” Smith said, “that there was a need to shatter the historic infrastructure of companies we’re operating under.”

On a visit to the Phluid Project earlier this year, there were none of the traditional signs to send you to specific clothing departments. Non-gendered mannequins stood atop tables, sporting dresses, pants, shirts, and graphic tees that say, “They Power,” a reference to the pronoun preference of many non-binary individuals.

The company said that, after spending its first year establishing the brand and a unique open sales floor experience, it’s now looking to better develop social media and e-commerce platforms, as well as strategic partnerships.

This summer, Phluid partnered with HBO and its series Euphoria, a drama about growing up in Gen Z America, and set up several pop-ups across the country, offering shoppers a capsule collection and panel discussions. Phluid also has a partnership with French clothing label Equipment on a gender fluid collection.

Big clothing retailers like H&M are starting to incorporate gender fluidity into a larger retail strategy, launching collections such as Denim United and last year’s collaboration with Eytys. Still, H&M doesn’t plan to completely eliminate gendered clothing or gendered clothing sections. LVMH-owned Sephora also started a campaign this summer aimed at an image of broader inclusiveness.

Fifty-six percent of Gen Z consumers already shop outside of their gender, ignoring clothing that’s labeled and categorized into gendered sections, according to a study by advertising agency J. Walter Thompson. Smith is very much acquainted with how those decisions are made. Before the Phluid Project, he worked for Nike, and eventually moved on to become an executive vice-president at Macy’s, and then Victoria’s Secret. He also served on the board of shoe-seller Steve Madden.

“I started to share the idea with friends and business partners and got a cold reaction,” Smith said of the Phluid Project’s beginnings. “It is difficult, and understandable, to go to investors with an unproven concept.”

“Other brands have to worry about losing customers because their concepts and missions are often antiquated,” Smith said. “We are a blank canvas.”

His store not only sells gender neutral clothing: it seeks to guarantee that its clothing comes from designers who support the gender-free clothing mission. The store’s original clothing only makes up 50% of its inventory. The rest is made by designers aligned with the company’s mission and concept. The store doesn’t shop vintage or buy from wholesale.

The Phluid Project isn’t the lone retailer in this space. Labels such as Radimo and Official Rebrand — which emphasizes sustainability — are on the same path.

According to Business of Fashion’s 2018 State of Fashion research, 66% of millennials worldwide are willing to spend more on brands that are sustainable. In response to this data, Official Rebrand is “turning unsold goods into new, one-of-a-kind collections,” said MI Leggett, its founder. Official Rebrand modifies donations with design and alterations, including by painting clothing with phrases and figures.

“The first pieces came from my own closet,” Leggett said. “Now I take clothing donations from friends, family, and clients commissioning custom work.” — Bloomberg

Cavite-Manila ferry service launched; free rides until Jan. 9

THE government on Sunday launched a ferry service between Cavite and Metro Manila, offering free rides until Jan. 9.

The Department of Transportation (DoTr) said in a statement the ferry service will operate to and from the Metrostar Ferry Terminal in Cavite City to Cultural Center of the Philippines (CCP) Port in Pasay City. Another route will be operated from the Metrostar Ferry Terminal to Lawton (Liwasang Bonifacio) in Manila and vice versa.

The routes will be operated by Shogun Ships Co., Inc. and Seaborne Ferries, Inc. Both shipping companies agreed to offer free rides during the first month of their operations starting Dec. 9 until Jan. 9 next year.

The DoTr said the “water jeepneys” will cut the usual three- to four-hour travel time from Manila to Cavite to just 15-20 minutes.

After Jan. 9, the regular fare for adults for the Cavite-CCP route, which will be operated by Seaborne Ferries, is P200. Fares for students, senior citizens, and children will be P160, P143, and P125, respectively.

As for the Cavite City-Lawton route, which will be operated by Shogun Ships, fares will be P160 for adults, P128 for students, P114 for senior citizens, and P80 for children (4-11 years old).

There will be eight trips daily between Cavite City and CCP from 6:00 a.m. until 6:30 p.m. The Cavite City-Lawton route will have six trips daily from 5:15 a.m. until 7:00 p.m. — Arjay L. Balinbin

Record-high reserves to boost peso, liquidity

THE RECORD-HIGH level of dollar reserves held by the central bank will bode well for the local unit’s strength versus the dollar and for liquidity, according to economists.

The Bangko Sentral ng Pilipinas (BSP) on Friday released preliminary data which showed that gross international reserves (GIR) amounted to $86.393 billion as of end-November, up by 0.65% from the $85.834-billion level in end-October and also an increase by 14.15% from the $75.682 billion seen a year ago.

This marked the third straight month of continued increase in the GIR level.

“Sustained recovery in BSP’s foreign reserves probably resulted from intervention by the monetary authorities in the spot market to avoid an overshoot of the P50 level. This helped bolster overall liquidity further while avoiding the side effects of rapid peso strengthening,” Bank of the Philippines Islands Lead Economist Emilio S. Neri said in a text message to BusinessWorld.

This was echoed by Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“Record-high GIR fundamentally provides greater buffer/support for the peso exchange rate versus the US dollar,” he said in a text message.

“Higher GIR recently brought about by continued growth in OFW (Overseas Filipino remittances), BPO (business process outsourcing) revenues, foreign tourism receipts, POGO (Philippine Offshore Gaming Operator) revenues, as well as continued inflows of foreign investments into the country.

Latest data from the BSP also showed that gold reserves in the central bank, which are also included in the country’s foreign exchange buffer, was seen at $8.015 billion, unchanged for the sixth consecutive month since May. However, it stretched by 3.08% from its end-November 2018 level of $7.776 billion.

BSP data showed gains from the central bank’s investments abroad, which make up the bulk of the reserves, dipped to P73.466 billion from end-October’s $73.689 billion but still bigger compared to the $61.317 billion a year ago.

Meanwhile, foreign currency deposits grew to $3.169 billion from $2.385 billion in the succeeding month. It was also lower than the $4.932-billion level traced in end-November 2018.

Net international reserves, which refer to the difference between the BSP’s GIR and total short-term liabilities, rose by $560 million to $86.38 billion as of end-November from the end-October level of $85.82 billion.

Remittances are expected to rise in the holiday season. Latest BSP data showed that cash remittances jumped to $2.379 billion in September, an increase of 6.24% from the $2.237 billion in the same month a year ago.

Meanwhile, data from the Bureau of Internal Revenue showed the government collected $1.6 billion worth of withholding taxes from workers of POGOs and service providers from January to August. — L.W.T. Noble