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Steven Tan named president of SM mall management unit

SM PRIME Holdings, Inc. has appointed Steven T. Tan as the new president of its mall management unit, Shopping Center Management Corp.

In a disclosure to the stock exchange Tuesday, the Sy-led integrated property developer said Mr. Tan was promoted from his previous role as chief operating officer of SM Supermalls.

“His new position underscores the rapid and dynamic changes in the Filipino consumer behavior. Mr. Tan’s focus on building meaningful shopping experiences consistently throughout his career prepares him for this next phase,” SM Prime President Jeffrey C. Lim was quoted in the statement as saying.

Mr. Tan is noted for leading the launch of several premium malls under SM Prime’s portfolio such as SM Mall of Asia in Pasay City in 2006 and SM Aura Premier in Taguig in 2013.

As chief operating officer and senior vice-president, he was tasked to handle the company’s mall properties in both the Philippines and China. He joined SM in 2004 when he took charge of mall operations for The Podium.

Before joining the company, Mr. Tan was part of the team that formed Barcelo Grand Hotel in Shanghai, China. He also worked at Howard Plaza Hotel in Taipei, Taiwan from 1990 to 1998.

When he returned to the Philippines in 2001, Mr. Tan worked as regional director of marketing and communications at FilBarcelo Hotels and Properties Management Corp. and took charge of its external affairs.

Mr. Tan completed his Masters in Business Administration at the Paris School of Management. He took up Business Management at the University of Santo Tomas for his undergraduate studies.

As of end-September 2019, SM Prime had 73 shopping malls in the Philippines and seven shopping malls in China.

Other businesses of the company are in residential projects, commercial properties, hotels and convention centers.

Revenues from SM Prime’s mall business grew 7% to P46.43 billion in the first nine months of 2019, pushing total revenues up 14% to P85.03 billion. Earnings during the period rose 18% to P27.6 billion. — Denise A. Valdez

Art Fair PH 2020: Going beyond visual arts to attract more goers

FOR the 8th installment of Art Fair Philippines (AFP), the focus will be on the process of creating art.

“For this year, we have concentrated on processes on how art is made. We’re focusing on under-the-radar artists who we believe work differently, who look at how they make art, rather than the outcome,” AFP co-founder Trickie Lopa told BusinessWorld, shortly after fair’s press launch on Jan. 21 at Raffles Makati.

The Link carpark in Makati will again be transformed into an art space for the fair, which runs from Feb. 21 to 23.

This year, AFP — which will have 61 exhibitors — introduces a workshop and film section, and will hold a collaboration with the Italian Embassy in Manila.

WHAT’S NEW
In line with the focus on creation, one of the new activities is the ArtFairPH/Open Studios — a series of workshops and demonstrations facilitated by practitioners in the arts.

“The reason we are doing this is so that we can provide people with a peek into the artists’ creative processes — how he does it, and how he thinks about it,” AFP Co-founder Lisa Periquet said during the press launch.

The section will present a two-day workshop on photography with Paco Guerrero; lighting techniques for photographers with Neal Oshima and Mark Nicdao; making wooden furniture with Benji Reyes; a demo on watercolor painting techniques with Claude Tayag; a cyanotype workshop with Alexis Oshima and Angela Silva; rubber-cut workshop with members of the Association of Pinoyprintmakers; and a sculptural planter-making workshop with Rita Gudiño of Tahanan Pottery.

Meanwhile, as part of the celebration of Philippine cinema’s 100 years, the art fair is introducing the ArtFairPH/Film section. Its inaugural cinema program, curated by Erwin Romulo, Philbert Dy, and Teddy Co, explores the possibilities of the film for the next hundred years. A selection of the best feature-length and short films, narrative and experimental, documentary and animation will be screened to showcase the diversity of Philippine cinema.

This section will also feature a special exhibition titled Self-Portrait by Lyle Nemenzo Sacris which allows visitors to sit and be filmed to be a part of 7,107 portraits. The film program will also have a special outdoor cinema from Feb. 14 to 16, with films projected at the ceiling of the entrance of the former Philippine Stock Exchange building on Ayala Avenue.

Then there is ArtFairPH/Incubators which will focus on creative spaces outside the gallery format. In this section, art/n23 will showcase an beehive-designed virtual reality piece titled Doon (Over There) by Issay Rodriguez. Other exhibitors include Giatay, Limbo, Loadnadito projects, Project 20, and Signum.

AND THERE’S MORE
The ArtFairPH/Projects section will again feature commissioned works — “interactive and/or thought-provoking installations by internationally established Filipino visual artists.” The special exhibits this year focus on Salvador Joel Alonday, Perry Argel, Jaime De Guzman, Roedil Joe Geraldo, Jellyfish Kisses, Gene Paul Martin, and Neil Pasilan. This section will also include an exhibit of works by Carlo Villafuerte, the 2020 recipient of the Karen H. Montinola Selection, a private grant created in homage to art patron Karen Montinola. Meanwhile, Hublot will present new works by Rodel Tapaya.

Also part of the ArtFairPH/Projects section is a special exhibition of drawings by the late artist Onib Olmedo, done in cooperation with the artist’s estate. A panel featuring artists Elmer Borlongan and Allan Cosio, and moderated by Carlomar Daona, will also discuss the works of the expressionist painter as part of the ArtFairPH/Talks.

Works of American artist Sol Lewitt, who is known for his conceptual art and minimalist style, will be shown during the fair, as curated by New York-based art historian Carina Evangelista.

This year, ArtFairPH/Photo will highlight the works of Filipino contemporary artist Poklong Anading.

Aside from the panel discussion on Onib Olmedo, the lecture series ArtFairPH/Talks — done in partnership with the Ateneo Art Gallery and Museum Foundation of the Philippines this year — will see Italian ambassador to the Philippines Giorgio Guglielmino discussing his book, The Originals, about 30 artists that made a difference in the art scene.

The local participating exhibitors are: 1335 Mabini/GMJ, Altro Mondo Gallery, ARCHIVO 1984, Art Cube, Art Underground, Art Verité, Artery Art Space, art/n23, Association of Pinoyprintmakers, Avellana Art Gallery, bio | trans | forms, Boston Art Gallery, CANVAS, Denise Weldon | Tom Epperson Photographs, District Gallery, Eskinita Art Gallery, Galerie Roberto, Gallery of Fine Arts, Galerie Stephanie, Giatay, J Studio, Kaida Contemporary, León Gallery, Limbo, Loadnadito projects, Luzviminda, Mariyah Gallery, METRO, Mono8, Orange Project, Paseo Art Gallery, Pintô Art Museum, Project 20, Salcedo Private View, Secret Fresh, Signum, Silverlens, Strange Fruit, Tarzeer Pictures, Tin-aw Art Gallery, Tropical Futures Institute, and Ysobel Art Gallery.

The foreign galleries that are taking part in this year’s art fair are Art Porters Gallery, Gajah Gallery, Mind Set Art Center, and Yavuz Gallery, all from Singapore; Artemis Art and G13 Gallery from Malaysia; ENERGY FIELD, Gallery Kogure, Hanada Gallery, Kobayashi Gallery, SHUKADO, and YOD Gallery + Asian Art Center from Japan; Nunu Fine Art and GALERIE OVO from Taiwan; La Lanta Fine Art and Number1 Gallery from Thailand, Cayón from Spain, and Vin Gallery from Vietnam. The Italian embassy is also bringing Galleria Tiziana di Caro, an art gallery from Naples, Italy.

This year the art will not be confined only to the various floors of the carpark but will also be found at various sites around the Makati Central Business District.

Now on its third year, the 10 Days of Art initiative — a series of events around the city held by galleries, museums, bars, restaurants, and retail establishments — will run from Feb. 14 to 23. For the schedule and updates, visit www.10daysofart.com.

“The energy is so dynamic. It’s so different, working with a lot of young artists pushing boundaries. And that’s what we hope the fair will feel like,” Ms. Lopa told BusinessWorld.

“We feel that we’ve managed to do that. And we hope to continue doing that,” she added.

In the past two years, Art Fair Philippines has welcomed 30,000 visitors to the carpark. The most number of visitors who visited the art fair was in 2017 when 40,000 people explored the various exhibits.

As for this year’s expected foot traffic, Ms. Lopa said: “We just hope we maintain the numbers.”

Fair tickets can be purchased in advance at www.artfairphilippines.com. Tickets will also be available at the reception area. For more information, visit the Art Fair Philippines website (artfairphilippines.com) and follow Art Fair Philippines on Instagram (@artfairph) and Facebook (www.facebook.com/artfairph). — Michelle Anne P. Soliman

AboitizPower to issue nearly P10B in fixed rate retail bonds

THE board of directors of Aboitiz Power Corp. (AboitizPower) has approved the issuance of up to P9.55 billion in fixed-rate retail bonds out of the P30-billion bonds registered in 2017 under the shelf registration program of the Securities and Exchange Commission, it told the stock exchange on Tuesday.

It said subject to market conditions, the fourth tranche bonds “is expected to be offered to the general public in the second quarter of 2020.”

AboitizPower, the energy arm of Aboitiz Equity Ventures, Inc., said the proceeds of the offering “will be used to finance planned acquisitions, future investments, and/or other corporate requirements.”

The company issued the first tranche out of the shelf-registered bonds on July 3, 2017 amounting to P3 billion. The second tranche was issued on Oct. 25, 2018 amounting to P10.2 billion, and the third on Oct. 14, 2019 amounting to P7.25 billion.

It said the bonds would be listed with the Philippine Dealing and Exchange Corp. “as and when issued.”

AboitizPower said its board had delegated to the company’s management the final determination of the issue amount, interest rate, offer price, tenors, and other terms and conditions of the bonds, including the parties that will manage or be involved in the offer.

In the same board meeting that took place on Tuesday, the board approved the appointment of Danel C. Aboitiz to replace Mikel A. Aboitiz as member of the board audit committee of AboitizPower.

On Tuesday, shares in AboitizPower slipped by P0.55 or 1.66% to close at P32.65 each. — VVS

Blind Bulgarian artist finds a way to keep painting

PLOVDIV, Bulgaria — Stamen Karamfilov bends low over a canvas, adding the finishing touches to a woodland landscape — no mean feat considering the Bulgarian artist is almost totally blind.

He initially gave up all hope of painting again when he suddenly lost his sight in 2015, and at one point contemplated suicide.

Then, after the initial crisis passed, he discovered there was still a way he could put paint to canvas.

“Great experience and intuition — that’s the secret,” said the 76-year-old, grinning in the middle of his studio in the southern city of Plovdiv, surrounded by vibrant treescapes and abstracts.

He found he could still just about see the difference between blocks of color, between light and dark, through his left eye. For the rest he relied on the instinct, skill, and memories built up over his long career as an artist and church icon restorer.

“I only paint on black canvases, because I can recognize the warm colors — orange, red, light green… I go out (painting) when it’s bright and sunny, because I can ‘see’ the shadows. When it’s dark and grey, I can’t.”

In the early stages, he stands a few centimeters away from the canvas and breaks down the image in his head into small squares.

“Then I connect it — small square to small square.” After that he coats the surface with melted, transparent wax — a classical technique that gives a smooth finish and lets him feel the lines and blocks of the image underneath.

“I can feel the relief with the touch of my fingers and I can recognize if it is a tree or the sun.” He uses a blowtorch to melt the wax and listens out for the change in the noise the flame makes when it reaches the edge of the canvas.

His work has been shown in Germany, Greece, Turkey and several Bulgarian cities. He is now preparing for the 33rd exhibition in his career and hoping to pass on the enkaustikos wax technique to an apprentice.

“Why not?,” he said. “I’ll turn 77 this year, so the 33rd exhibition doesn’t sound too bad.” — Reuters

ATI posts double-digit rise in Batangas cargo volume

ASIAN Terminals Inc. (ATI) said it handled more than 310,000 twenty-foot equivalent units (TEUs) at the Batangas Container Terminal (BCT) in 2019, up 25% from the previous year.

In a statement on Tuesday, the listed port operator said: “Capping 2019 year on a record note, BCT handled over 310,000 teus of international boxes for economic locators and other businesses based mainly in Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon).”

The latest cargo volume recorded is about 20% higher than 2018’s volume, ATI said.

This keeps BCT’s “double-digit” cargo growth over the past six years, the listed company added.

ATI attributes its performance to its “growing customers” and the support it gets from its partners.

It said its expansion program for the BCT in 2019 resulted in “higher capacity and greater efficiency” for port users in the region.

ATI has said that its capital expenditure last year was set at $300 million (about P15.6 billion), where more than P2.5 billion would be spent in expanding BCT.

The listed port operator opened the BCT’s Berth 2 in April last year.

ATI said the additional berth would almost double BCT’s capacity to about 500,000 TEUs from the previous 350,000 TEUs. — Arjay L. Balinbin

BDO sells majority stake in its leasing subsidiary

BDO UNIBANK, Inc. is selling its controlling stake in its publicly listed subsidiary BDO Leasing and Finance, Inc. (BDOLF), to a third party for about P5.451 billion as part of the restructuring of its leasing business.

In a filing with the local bourse on Tuesday, BDO said it has entered into an agreement to sell its equity stake worth 88.54% of BDOLF.

The bank said the amount of consideration is equivalent to the sellers’ pro-rata share in the net asset value of the firm as of the closing date which is estimated to be at P5.451 billion. Apart from this, a premium of P400 million shall also be paid upon closing of the transaction.

BDO said so far, the purchasers already paid on Jan. 24 a total P65 million as downpayment for more than 1.9 billion shares in BDOLF. The balance shall be paid at closing.

“The restructuring of BDO’s leasing business is being undertaken to optimize the financial needs of clients in light of new accounting regulations covering lease transactions,” the bank said in the filing.

In January 2019, International Financial Reporting Standards or IFRS 16 — which requires leases to be recognized on-balance sheet just like a loan facility — took effect.

“This makes lease transactions a less attractive option to corporate borrowers compared to the past,” BDO said in a statement last Friday.

BDO said the sale was approved by its board of directors on May 25.

“We wish to reassure BDOLF clients that their financing requirements will continue to be serviced, and there will be no effective change in their existing lease arrangements that will be assumed by BDO Finance,” BDOLF President Roberto E. Lapid said in a statement on Friday.

Under the sales agreement, BDOLF will adopt a new name while its Articles of Incorporation and By-laws shall be revised based on its new business direction.

Moreover, a tender offer will also be done by the buyer as a regulatory requirement. This will provide minority shareholders a chance to sell their BDOLF shares.

As part of BDO’s restructuring of its leasing business, the parent bank incorporated its new, privately held finance firm BDO Finance Corp. to give customers access to lease products and services. BDO Finance will also assume current lease transactions booked by BDOLF.

BDO’s net income climbed by 43.35% to P11.967 billion in the third quarter of 2019 from P8.348 billion in the comparable year-ago period, buoyed by higher recurring core revenues.

This brought its income in the nine months to September to P32.1 billion, improving by 49.3% from the P21.5 billion seen in the same period of 2018.

The bank’s shares closed at P153.50 apiece on Tuesday, down by 1.60% or 2.50 centavos from Monday’s finish. — LWTN

Artist paints images of volcanic devastation using ash

TANAUAN — Ash from the rumbling Taal volcano has inspired an artist and instructor to paint watercolors using the gray powder that had covered the plants in her backyard.

Janina Sanico, who lives in the town of Tanauan, Batangas near the volcano, collected the ash, mixed it with water and binder, and started painting images, some of them depicting the devastation caused by the small but dangerous volcano.

“So that was the pain that I felt. So when I saw the animals, that’s where I got my inspiration for my paintings”, said the 24-year-old Ms. Sanico.

More than 140,000 people evacuated after Taal, one of the country’s most active volcanoes, erupted on Jan. 12, blanketing homes, schools, and farms with ash.

Sanico, a promoter of natural pigment water colors, said she has been selling her paintings and donating the profits to help thousands of people who had been displaced.

“Since this ash came from the earth, I experimented and I studied. Then when I posted my artwork on social media, I found that it was widely received by people,” said Ms. Sanico.

She has used different mediums such as coffee for painting before, but ash, she said, surprisingly worked well enough as long as it had enough water.

Volcanologists have lowered the danger level of Taal at 4 out of a possible 5, allowing people to return to their homes around the volcano except for those within a seven-kilometer danger zone.

At just 311 meters high, Taal is one of the world’s smallest active volcanoes. It killed more than 1,300 people in an eruption in 1911. — Reuters

Meralco unit Spectrum to double its installed power capacity this year

THE renewable energy subsidiary of Manila Electric Co. (Meralco) is targeting to double its installed capacity this year and reach a total of 40 megawatts (MW), as more residential customers turn to solar rooftop systems to power their homes.

“We’re close to 20 MW already of installed capacity for Spectrum,” Victor S. Genuino, president and chief executive officer of Meralco unit MSpectrum, Inc. told reporters after the launch of a solar rooftop project on Monday.

He said the company has a “big target” this year, including the expansion of its microgrid facilities on Isla Verde and Cagbalete islands.

“I think [for this year], we’re gonna aim to double. Some of it kasi are PPAs (power purchase agreements), ’di ba we have our existing PPA contracts, and then the others we will just add. So we’ll carry on the PPA for the following years,” he said.

“Maybe we wanna add an additional 20 MW this year. That would be good,” he added.

MSpectrum, or the Spectrum trade name it uses, is behind the power microgrid system in Cagbalete, a fishing island village and an expanding tourism spot in Quezon province.

In July last year, the system was launched after the completion of a hybrid generating plant that features 60 kilowatt-peak (kWp) solar photovoltaic system, 150-kWh battery energy storage, and two units of 30 kW diesel generators.

Initially, the microgrid will provide 24/7 power to around 200 households in Cagbalete, which Meralco described as a 1,795-hectare water locked island with two barangays. The island falls under the distribution utility’s service franchise.

Meralco previously launched a hybrid generating power facility in Isla Verde in Batangas province.

“We’re exploring a lot of different projects now. Think of it as anything off-grid,” said Mr. Genuino, who is also Meralco first vice-president and head of customer retail services and corporate communications.

“There are off-grid communities that still are unserved outside of our franchise area. There are different commercial establishments that don’t have access to direct power — resorts, for one, mining communities, agricultural farms. These are all target opportunities for microgrid,” he said.

He said what was committed by Spectrum this year is to expand the capacity of the Isla Verde project and to complete the second phase of the Cagbalete project. He said the initial phase covered the provision of power generation sets, but the second phase will be to put up solar panels and the batteries.

“We’re targeting no later than maybe the middle of this year, that should be completed already,” he said.

“Siguro less than 1 [MW] each,” he said, when asked about the resulting installed capacity in the islands.

Mr. Genuino said that he was hopeful that other industries would open in the two islands once power supply becomes stable.

He said Spectrum would also be offering more residential solar rooftop systems, including “big customers” that would be coming soon.

“I think this year we will see a lot more residential customers and small businesses adopt to solar,” he said. “We can go nationwide.”

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon

Rediscount rates increased

BSP
THE RATES have been raised following new rules from the Monetary Board. — BW FILE PHOTO

RATES APPLICABLE for the central bank’s peso rediscount facility this month as well as dollar or yen-denominated loans have been increased after the adoption of a flexible term premium which was approved by the Monetary Board.

“Such amendment in the rediscount rates is part of the broader reforms of the BSP (Bangko Sentral ng Pilipinas) to bring its policies in line with its lender of last resort function and to ensure that rediscounting policies remain relevant to the present and future demands on monetary management,” the BSP said in a statement on Tuesday.

In a previous circular letter, BSP Governor Benjamin E. Diokno said the yield on the peso rediscount facility will be the overnight lending rate which is currently at four percent to be added to a spread depending on the term of the loan.

“The appropriate spread for each term of the loan may change periodically to complement changes in the BSP’s monetary policy goals and to reflect movements in the market interest rates,” the central bank said.

With this, January peso rediscount rates as of Jan. 28 for loans with tenors of up to three months and up to six months are now at 5.4465% and 6.393%, up from the previously posted 4.5625% and 4.625%, respectively.

On the other hand, for the Exporters Dollar and Yen Rediscount Facility (EDYRF), computation for the yields will continue to be based on the 90-day London Inter-Bank Offered Rate plus the spread depending on the tenor of the credits, the BSP said.

For the dollar credit lines that form part of the EDYRF, increased rate for loans maturing from one to 90 days is at 4.85488% from (3.90838%); those with a tenor within a 91-180 day time frame will have a yield of 5.80138 (from 3.97088%); and those with a term of 181 days up to a year have a rate of 7.69438% from the initially posted 4.0338%.

Meanwhile, rates for yen loans have been increased to 2.89917% (from 1.95267%) for one to 90-day loans; 3.84567% (from 2.01517%) for credits with a maturity period of 91-180 days; and 5.73867% (from 2.07767%) for loans that will mature within 181-360 days.

The central bank lets banks access additional money supply by posting their collectibles from clients as collateral through the rediscount window.

This gives lenders the opportunity to use fresh cash — which could be in peso, dollar, or yen — to disburse more loans for corporate or retail clients and service unexpected withdrawals.

In 2019, peso rediscount loans totaled P122.167 billion. Banks did not avail of the peso rediscount facility in the last two months of the year as successive reserve requirement ratio (RRR) cuts from the BSP provided them additional liquidity.

The RRR for big banks now stands at 14% while that for thrift and rural lenders are at five and three percent, respectively after a total of 400 basis points reductions from the BSP last year. — L.W.T. Noble

Salcedo Auction 10th year kicks off with art+design

AS PART of its year-long celebration of its first decade, Salcedo Auctions’ subsidiary Gavel&Block opens the sale season with art+design, featuring a curated selection of nearly 300 collectibles.

Gavel&Block will be holding the art+design Vernissage on Feb. 1. The public preview will then run until Feb. 7, 10 a.m.-6 p.m. The auction will be held on Feb. 8, 2 p.m., at NEX Tower, 6786 Ayala Ave., Makati City.

The art+design sale focus on potential, and serves as an opportunity for emerging collectors to find the perfect piece to start growing their collections, and for established collectors to add depth to their troves. It features a diverse lineup of fine and decorative art, crystal, porcelain, silver, rare books, maps, and memorabilia. There are works from renowned modern and contemporary Filipino artists such as National Artists Fernando Amorsolo, José Joya, and Benedicto “BenCab” Cabrera, together with iconic pieces by Roberto Chabet, and Juvenal Sansó among other established artists.

Other art highlights include abstract works such as watercolors by Nena Saguil, three early paintings by Roberto Chabet, and pieces from artists Gus Albor and Romulo Olazo. Folk-genre has a strong presence in this auction with works by the likes of Oscar Zalameda, Angelito Antonio, Tam Austria, Cesar Buenaventura, Elias Laxa, Simeon Saulog. They serve as historical counterpoints to works by contemporary artists such as Jigger Cruz, Zean Cabangis, and Jayson Oliveria.

Also worth noting in this sale is a pair of drawings by the late performance artist Carlos Celdran, sketches that mirror his cultural activism. This is Celdran’s first appearance at a Gavel&Block auction.

“We are excited to open our 10th year with this sale, which emphasizes the joy of collecting,” managing director Victor Silvino was quoted as saying in a release. “Through art+design, we hope that more people will be able to experience the thrill of auctions, discovering a piece to start or add to their existing collections. It’s at the heart of what we do, being the leaders of the fine art and collectibles auction industry in the country, and is the perfect way to open our tenth-year anniversary celebrations.”

The art+design online catalogue is available at salcedoauctions.com. For inquiries, e-mail info@salcedoauctions.com.

PXP Energy says drilling starts in Peru exploration well

PXP Energy Corp. said on Tuesday that drilling had started for an exploration well in Peru in which it has participating interest.

“The drilling operation is estimated to take 30 days and shall drill to approximately 3,000 metres subsea,” it told the stock exchange.

The company was quoting an announcement made in Australia by Karoon Gas Australia Ltd. about the drilling of Marina-1X well in Peru Z-38, offshore Peru.

“Peru Block Z38’s Marina prospect has an unrisked best estimate prospective resource of 256 million barrels (64 million barrels net to Pitkin). This prospect will be the first well to be drilled in Block Z-38. Pitkin is carried in the cost of Marina-1X and a second future well under a Farm-in Agreement signed with Karoon in 2008,” PXP Energy said.

Pitkin Petroleum Ltd., a 53.43%-owned subsidiary of PXP Energy, holds a 25% participating interest in Peru Block Z-38.

Earlier this month, PXP Energy said the Marina prospect comprises a large fault bounded structure with targets at multiple levels. The structures are well defined by 3D seismic, it added.

Karoon’s wholly owned subsidiary, KEI (Peru Z-38) Sucursal del Peru, owns a 40% operating equity interest in the blocks with Tullow Oil Ltd. holding 35% and Pitkin Petroleum holding the rest.

On Tuesday, shares in PXP Energy climbed by P0.64 or 7.02% to close at P9.76 each. — VVS

RCBC to set up digital-only rural bank

RIZAL COMMERCIAL Banking Corp. is eyeing to compete in the virtual bank space. — BW FILE PHOTO

RIZAL COMMERCIAL Banking Corp. (RCBC) will establish a rural bank that will join the digital banking race in the country, the bank said in a filing with the local bourse on Tuesday.

The Yuchengco-led lender said that it will also upsize its medium term note program (MTN) by $1 billion to $3 billion from the original $2-billion plan.

RCBC said in its filing on Tuesday that the rural bank will have an “electronic payment and financial services and cloud-based core banking licenses from the Bangko Sentral ng Pilipinas (BSP).” Its establishment will be subject to the approvals of the BSP, Securities and Exchange Commission, and other regulatory bodies, as necessary.

RCBC President and Chief Executive Officer Eugene S. Acevedo told BusinessWorld in an interview during the central bank’s annual reception for the banking community on Friday when asked about its plan to set up a digital-only bank: “We’re gonna be launching something in February but a lot of work and investments have been made in that space.”

In November 2019, RCBC Executive Vice-President and Chief Innovation and Inclusion Officer Angelito “Lito” M. Villanueva said the bank is looking into joining the digital-only banking race in the country. He noted that local players have yet to offer a digital-only bank as a separate proposition.

Mr. Villanueva has said that they will look into capturing the mass market as clients for their virtual bank. He also noted that good communication is key to make sure that their target market can appreciate the propositions of online-only banking.

For Mr. Acevedo, their digitization drive is more than just a “nice project” because it will help them with cost reduction as well.

“We see kasi digitization as not just something like a nice project, but really because digitization allows us to improve the customer experience in a huge way. While doing that, we are able to reduce our costs, significantly,” he said.

Mr. Villanueva earlier said they are eyeing to require an average daily balance of around P800-1,000 for their virtual bank.

He said 38% of about two million RCBC retail clients access services through their online app.

Current virtual banking players in the country are ING Bank N.V. Manila and CIMB Bank Philippines. Both started their operations in 2019.

These players currently do not impose a minimum balance requirement for their clients and do an electronic Know-Your-Customer process through their applications.

Singapore-based digital bank Tonik Financial, through its local unit Tonik Digital Bank, Inc., in December secured a license from the central bank to operate its own virtual bank.

MTN PROGRAM
Meanwhile, RCBC said the increase in its MTN program to $3 billion was approved by its board of directors last Monday.

The bank issued $300 million in five-year unsecured sustainability bonds in September to back its loan portfolio and green projects.

The said notes were issued at 3% per annum and was a drawdown from the then only $2-billion MTN program of the bank under its Sustainable Finance Framework, which was established to streamline sustainable financing instruments that can fund loans and projects with environmental and social impact.

RCBC saw its net earnings climb by 41% to P4.5 billion in the first nine months of 2019 from P3.2 billion in the comparable year-ago period, with growth fuelled by its core businesses.

The bank’s shares ended trading at P22 apiece on Tuesday, unchanged from its previous finish. — LWTN

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