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Fashion ‘raping’ women — Armani

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

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

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

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

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

Automotive illumination takes spotlight in Art Fair PH

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

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

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

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

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

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

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

A taste of Siquijor with Nissan

Text and photos by Angel Rivero

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

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

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

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

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

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

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

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

Tax court denies Deutsche Knowledge appeal over cancelled refund claim

By Vann Marlo M. Villegas
Reporter

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HSA, AMLA amendments sought

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

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

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

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

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

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

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

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

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

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

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

Victoria’s Secret’s challenging makeover

VICTORIA’S SECRET has finally found its angel.

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

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

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

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

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

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

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

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

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

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

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

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

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

Malaysia to implement B30 biodiesel mandate in transport sector before 2025

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

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

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

Dashboard (02/24/20)

Toyota Motor Philippines welcomes new president

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

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

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

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

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

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

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

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

Porsche sales up 10% in 2019

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

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

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

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

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

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

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

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

Shares seen steady on firms’ earnings reports

By Denise A. Valdez
Reporter

LOCAL SHARES are seen to move in a stable range this week, with major catalysts being the release of corporate earnings and developments in the outbreak of the coronavirus disease 2019 (COVID-19).

The 30-member Philippine Stock Exchange index (PSEi) closed lower on Friday at 7,369.78, down 43.22 points or 0.58% from the previous session. But it was higher by 1.21% on a weekly basis, a reversal of the drop seen a week ago.

Value turnover also rose 1.4% to P6.13 billion despite foreign investors turning sellers with an average net selling of P250 million last week from a net buying of P163 million the week prior.

“Markets found comfort in Beijing’s message over the week, which communicated that virus control efforts ‘are working.’ Thus, coming from a deep selloff (the previous week), the bellwether index made an 87-point jump to close the week at 7,369,” online brokerage 2TradeAsia.com said in a market note.

This week, the scheduled release of full year 2019 earnings of some listed firms is seen to be a major driver of the market.

“We’re expecting the market to move sideways within 7,200 and 7,500 range as COVID-19 worries linger in the market… (On) a positive note, anticipation of FY2019 corporate earnings result may lift sentiment along with the month-end window dressing,” Philstocks Financial, Inc. Research Associate Claire T. Alviar said via text.

2TradeAsia.com pointed to the same catalyst, noting that those scheduled to release their earnings this week comprise 25% of the PSEi basket — Manila Electric Co.; Metro Pacific Investments Corp.; BDO Unibank, Inc.; and SM Investments Corp.

“So far, average 2019 EPS (earnings per share) growth for companies that have reported as of Feb. 21 (six firms, 32% of PSEi basket) is at 14.7%. With participants in ‘earnings mode’, corporates will likely have to clarify growth expectations, especially in the context of COVID-19 and Taal eruption impact, among others,“ it said. It noted that its weighted average EPS growth estimate for 2020 is 10%.

“As the macro picture awaits more cogent policies to counter COVID-19’s economic impact, corporate watches will continue to heed for capex (capital expenditure) and earnings feelers for 2020, and from there weigh whether ‘hope springs eternal’ amid the noise,” 2TradeAsia.com said.

Philstocks Financial’s Ms. Alviar said the market may record weaker volume this week due to the shortened trading due to Tuesday’s holiday. But 2TradeAsia.com said it may eventually increase later in the week.

“Volume scenario in the coming week may be characterized by a crescendo, with a holiday early in the week possibly thinning out turnover, before later finding momentum on funds’ window dressing,” it said. “As such, brace for volatility, as the index finds composure near the next hurdle at 7,500.”

The brokerage put immediate support at 7,200-7,300 and resistance at 7,400-7,500.

India allots import licenses for Indonesia refined palmolein

MUMBAI/NEW DELHI — India has issued import licenses for 1.1 million tonnes of refined palmolein from Indonesia, government and trade sources told Reuters, a move that has surprised the industry as only last month New Delhi restricted imports of the commodity.

A resumption in refined palmolein buying by India, the world’s biggest palm oil importer, could lift its total palm oil imports and support Malaysian palm oil futures FCPOc3, which have corrected a fifth from a three-year high hit in January.

India put refined palm oil and palmolein on the list of restricted items on Jan. 8, a move sources said was retaliation against top supplier Malaysia after its criticism of actions in Kashmir and a new citizenship law.

The move prompted traders to seek permission from the Directorate General of Foreign Trade (DGFT) to import refined palmolein, and the commerce ministry’s wing received more than 100 applications for licenses.

The DGFT has issued import licenses for 1.1 million tonnes of refined palmolein to traders based on their applications, a government official and three traders told Reuters.

New Delhi has given permission to import refined palmolein only from Indonesia, a government official said.

In the second week of January New Delhi privately urged palm oil importers to boycott Malaysian products after Prime Minister Mahathir Mohamad criticized India’s actions in Kashmir and its new citizenship law.

In their application importers were required to mention “country of origin” and all specified Indonesia, said one trader who received a license.

“I don’t know anyone who mentioned Malaysia as the country of origin. I know a few others who mentioned Indonesia,” the trader said.

HUGE VOLUME
The allocation of licenses surprised the industry and senior officials of the commerce ministry.

“Allowing large-scale imports of refined palmolein defeats the purpose of putting the commodity in the restricted list for imports,” said B.V. Mehta, executive director of trade body the Solvent Extractors’ Association (SEA), which is based in Mumbai.

India’s edible oil industry has been seeking import curbs on refined palm oil to boost local refining.

At a meeting with industry officials on Wednesday, a senior official of the commerce ministry expressed displeasure at allowing large-scale imports of refined palm oil, and asked DGFT officials not to allocate more licenses, said a trader who attended.

A rally in edible oil prices in the last few weeks prompted New Delhi to examine changes in the import policy, said another government official.

India’s commerce ministry did not respond to a request for further information

New Delhi’s palm oil imports in January fell 27% from a year ago to 594,804 tonnes, partly due to the restriction on imports of refined palm oil, the SEA said in a statement.

India imported 9.4 million tonnes of palm oil in the marketing year that ended on October 31, including 2.72 million tonnes of refined palm oil.

Palm oil makes up nearly two-thirds of India’s total imports of edible oil. It buys palm oil mainly from Indonesia and Malaysia, which are the world’s top and second biggest producer of the commodity respectively. — Reuters

Gov’t debt yields drop on BSP bets

YIELDS ON government securities (GS) went down last week after the Bangko Sentral ng Pilipinas (BSP) signaled another rate cut as early as the second quarter.

GS yields, which move opposite to prices, dropped by an average of seven basis points (bps) week on week, according to Philippine Dealing System’s PHP Bloomberg Valuation Service Reference Rates published on Feb. 21.

“Sentiment was renewed when BSP Gov. [Benjamin E. Diokno] hinted [on Feb. 14] that they might resume their rate cut cycle as early as Q2. Looks like this is a lot earlier than expected, hence the strong buying across all tenors that carried over to [last] week,” Carlyn Therese X. Dulay, Security Bank Corp. first vice-president and head of Institutional Sales, said in an e-mail interview last Friday.

“Apart from that, the 10-year auction was surprisingly very strong and US treasuries continue to rally towards multi-month lows (US 10-year hit 1.44% last August 2019 and it looks like it’s going there now),” she added.

For his part, ATRAM Trust Corp. Head of Fixed Income Jose Miguel B. Liboro said in separate e-mail interview: “Trading volumes have seen a dramatic increase over the last three weeks, showing clear and consistent buying interest across tenors,” citing the Bureau of the Treasury’s (BTr) full award of its reissued 10-year paper offering last Tuesday.

“Market optimism has surged with the supply overhang of the RTB (retail Treasury bonds) lifted, inflation anticipated to stabilize at the 3.0% level and the BSP looking to cut policy rates further this 2020,” he said.

On Feb. 14, the BSP chief said the Monetary Board (MB) might trim key policy rates by another 25 bps as early as the second quarter or the latter half of the year to rein in the possible effects of the coronavirus disease on the economy.

This came after the MB implemented a 25-bp cut to its key rates to a range of 3.25-4.25% on Feb. 6.

The decision followed the 75-bp easing that took effect last year, partially dialing back the 175 bps rate increasing in 2018 to curb the rising inflation expectations.

The central bank also revised its inflation outlook for this year to three percent from 2.9% previously, while maintaining a 2.9% inflation forecast for 2021 — still within the 2-4% target range.

Meanwhile, the BTr fully awarded the reissued 10-year Treasury bonds (T-bonds) worth P30 billion it auctioned off on Feb. 18.

The offering was more than twice oversubscribed, with total tenders reaching P83.5 billion, prompting the Treasury to open its tap facility for another P15 billion.

The average rate for the 10-year debt was lower by 20.8 bps at 4.409% from the 4.617% average yield fetched during the Nov. 12 offering.

Earlier this month, the government raised P310.8 billion — P250 billion in fresh funds and P60.8 billion from the exchange offer program — from its three-year RTB offering.

The BTr has set a P420-billion local borrowing program this quarter, divided into P240-billion Treasury bills and P180-billion T-bonds.

The government eyes to raise P1.4 trillion this year from local and foreign lenders to seal off its budget deficit, which is expected to widen to as much as 3.2% of the economy.

Yields on benchmark tenors fell across-the-board last Friday against the week-ago finish with three-month, six-month, and one-year Treasury bills (T-bills) dropping 9.9 bps, 2.9 bps, and 3.5 bps, respectively, to 3.100%, 3.420%, and 3.869%.

Rates on two-, three-, four-, five-, and seven-year T-bonds declined by 7.4 bps, 7.9 bps, 8.8 bps, 8.7 bps, and 5.4 bps, respectively, fetching 3.943%, 4.061%, 4.131%, 4.184%, and 4.279%.

Yields on 10-, 20-, and 25-year papers likewise edged lower by 3.5 bps, 11.2 bps, and 7.6 bps, respectively, to 4.352%, 4.857%, and 4.929%.

For this week’s trading, Mr. Liboro sees a “slight pause” in profit taking as GS yields continue to “grind lower over the longer term.”

“However, while inflation remains a risk, given the readiness of the BSP to continue easing policy and the trend in the region of neighboring central banks who have expressed similar sentiments, rates appear poised to continue to grind lower over the longer term,” he said.

“We’ll have T-bills again [this] week but in any case, these will definitely be issued 5-10 bps lower given the move [last] week,” Security Bank’s Ms. Dulay said.

The government will issue P20 billion worth of T-bills today. Broken down, the Treasury will offer P6 billion in 91-day debt, P6 billion in 182-day papers, and P8 billion worth of 364-day notes.

“Apart from that, no drivers on the local front so we can expect yields to trade within range and maybe follow moves in US Treasuries,” she added. — Mark T. Amoguis

Investors sell MacroAsia shares after award of Sangley airport project

By Lourdes O. Pilar
Researcher

INVESTORS sold MacroAsia Corp. shares following news of the company, along with its Chinese partner China Communications Construction Co. Ltd. (CCCC), being awarded the contract to develop Sangley airport in Cavite.

A total of 24.91 million MacroAsia shares worth P272.41 million were traded from Feb. 17 to 21, data from the Philippine Stock Exchange showed.

MacroAsia shares closed at P10.02 apiece on Friday, down 9.73% from P11 a week ago. Year to date, the stock’s share price is down 40.7%.

In an e-mail, Unicapital Securities, Inc. Technical Analyst Cristopher Adrian T. San Pedro attributed MacroAsia’s stock movement last week to investors reacting to the news on the awarding of the $10-billion project by the province of Cavite to MacroAsia and CCCC.

“Unfortunately, the stock price reaction was a sell on news after the stock established a short term peak at P12.00 last February 17 to close the week at P10.02,” Mr. San Pedro said.

The province of Cavite has awarded the four-runway airport project to the Lucio C. Tan-led company and the Chinese state-run firm. MacroAsia said it received the notice of selection and award for the airport project on Feb. 14.

The four-runway project, which is double the two runways of the Ninoy Aquino International Airport (NAIA) in Metro Manila, will undergo three phases. The first phase, which costs $4 billion, includes the construction of the Sangley connector road and bridge to connect the Kawit segment of the Manila-Cavite Expressway (CAVITEx) to the international airport.

Phase one will involve the construction of the airport’s first runway, which can accommodate 25 million passengers annually. The consortium will have to buy from the Transportation department the existing Sangley Airport before it could start construction works for the first phase.

The same consortium will work on the other two phases of the project, but may involve contract renegotiations, Cavite Governor Juanito Victor C. Remulla was quoted in previous reports as saying.

The second phase, which will cost about $6 billion, involves the construction of two more runways with a yearly capacity of 75 million passengers, while the last phase is the expansion to four runways to accommodate 130 million passengers yearly.

The Cavite provincial government targets the airport to start fully operating by 2023, with partial operations to start a year earlier. The fourth runway will be opened after six years.

MacroAsia’s attributable net income stood at P858.15 million in the nine months to September 2019, 11% more than the P773.21 million in the same period in 2018.

Unicapital’s Mr. San Pedro expects the stock to consolidate between P9.85 support and P11.20 resistance in the short term. “The stock might resume its downtrend path to re-test P9.28 and P8.82 support levels if it fails to hold above P10 [this week],” he said.

For Mercantile Securities, Inc. Analyst Jeff Radley C. See: “The stock may continue to slide down and visit its next support level at P8.80. Support levels to watch are P10 and P8.80,” he said in a separate e-mail.

Mr. See placed the stock’s resistance levels at P11.20 and P12.

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