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IMF keeps growth forecast for PHL

THE International Monetary Fund (IMF) maintained its growth forecast for the Philippines for this year, despite lowering global growth projections.

“The Philippines continues to be one of top performers in economic growth in the region. The IMF’s growth forecast for the Philippines remains unchanged at 5.7% in 2019,” IMF resident representative to the Philippines Yongzheng Yang said in an e-mail to BusinessWorld.

“We think growth will pick up to 6.3% this year, supported by strong domestic demand, including the continued scaling up of public investment and robust consumption,” he added.

If realized, the 2019 and 2020 growth projections of IMF are short of the government’s 6-6.5% growth target for 2019 and the 6.5-7.5% target for 2020 and 2021.

In its World Economic Outlook (WEO) Update released on Monday, the IMF estimated global growth to jump from an estimated 2.9% last year to 3.3% in 2020, and to 3.4% for 2021. The projections for 2020 and 2021 are 0.1 percentage point and 0.2 percentage points lower than those in the October WEO.

Sought for comment about IMF’s growth forecast for the country, UnionBank of the Philippines, Inc., Chief Economist Ruben Carlo O. Asuncion said: “IMF has maintained its forecasts for the Philippines because they see that the country has undertaken what has been needed for the economy to expand consistently, i.e., the investment in infrastructure development and socio-economic services.”

At the same time, the IMF downgraded its growth forecast for ASEAN-5, comprised of Philippines, Malaysia, Indonesia, Thailand, and Vietnam, to 4.8% in 2020 and 5.1% in 2021. Both projections are 0.1 percentage point lower than the WEO forecast in October.

“After slowing to 4.7% in 2019, growth in ASEAN-5 countries is projected to remain stable in 2020 before picking up in 2021,” IMF said. “Growth prospects have been revised down slightly for Indonesia and Thailand, where continued weakness in exports is also weighing on domestic demand.”

Mr. Asuncion said the IMF may have reiterated that “global growth prospects is seemingly recovering but tentative and sluggish with no evident turning point yet.”

“This may probably have been the basis for the ASEAN-5 assumption that is largely composed of trade-based economies,” he added.

The Philippine Statistics Authority is set to report the fourth-quarter gross domestic product (GDP) growth on Thursday. Average growth in the first three quarters was at 5.8% after the 6.2% pace logged in the third quarter. — Luz Wendy T. Noble

Offshore bond issuances likely within 1st semester

THE Bureau of the Treasury could offer all its offshore bond issuances within the first half of the year after successfully securing all the necessary approvals, a top official said.

Deputy Treasurer Erwin D. Sta. Ana said on Tuesday that the Treasury has already received the needed approvals for all their commercial issuances in the international capital markets.

Aside from the euro-denominated issuance that was announced on Monday, Mr. Sta. Ana said they will likely tap other bond markets, with dollar, panda and samurai bonds also on the table.

Asked if all offshore issuances will be done within the first semester, he said “that’s a strategy that we are actually forming at this time… That’s a possibility…but that remains subject to market conditions, of course.”

However, the Treasury has yet to set a timetable for all of its offshore issuances, including the euro-denominated bonds.

“It’s really more on whether it’s opportunistic for us to actually go out. We’re ready anytime,” Mr. Sta. Ana told reporters.

For the dollar-denominated bond offer, he said they can issue these papers “back-to-back” with the euro bonds, but they are still coordinating with Finance Secretary Carlos G. Dominguez III on the matter.

“We can do some sort of a back-to-back, also just do a wait-and-see or monitor the US market some more. There have been lots of issuances in that space so we’ll see from a supply perspective whether it’s time to go. So it’s really more of timing now,” he said.

Meanwhile, he said that they are considering returning to the samurai debt market since the bonds they issued back in 2010 will mature this year.

Sought for comment, a bond trader said offshore bond issuances should be launched as early as possible “because rates are not coming back to where it was a month ago given the developments.”

EURO BONDS
Meanwhile, Mr. Sta. Ana said they still need to determine the size of its planned euro bond issuance but based on initial feedback, there are more interested investors for the three-year and nine-year tenors.

“Based on the initial feedback, I think there are a group of investors that are more leaning towards the three, and there is a more mainstream kind of fund investor group in the nine-year (tenor),” Mr. Sta. Ana said.

Mr. Sta. Ana said the volume size will be based on the order book they will receive but they are still planning to do a benchmark size issue, which is around $500 million or $1 billion for the two tenors.

“At the minimum, if you look at benchmark size for ($500 million) each, yes, ($1 billion). We also can upsize if there’s ample demand. So that’s left to be seen,” he added.

“Actually we had successful calls with select investors and updates from the banks indicate good, well, a highly successful initial feedback from investors, not only in Europe, but also in Asia. So, we have seen a diverse order book so far. Although, that’s just initial expressions of interest. So we will decide later this afternoon whether we are issuing or we are really executing the trading within the day,” he said on Tuesday.

Moody’s Investors Service on Tuesday assigned Baa2 senior unsecured ratings for the euro-denominated dual-tranche bond offerings, which mirrors the country’s sovereign credit rating.

On Monday, S&P Global Ratings assigned a BBB+ rating to the proposed issuance, while Fitch Ratings gave it an expected rating of BBB, also at par with their ratings on the Philippines.

UBS, Citigroup, Standard Chartered Bank, and Credit Suisse will be the joint lead managers and joint bookrunners for the transaction, Reuters said on Monday.

The government returned to the European market in May last year after 13 years, raising €750 million ($852 million) via an offer of eight-year euro bonds, which carry a coupon rate of 0.875%.

The Treasury is programmed to borrow $3.7 billion from external sources this year. This will help finance the government’s P4.1-trillion budget this year, which is 12% higher than last year’s spending plan. — Beatrice M. Laforga

AMLC wants power to issue subpoenas

THE Anti-Money Laundering Council (AMLC) is seeking to have the power to issue subpoenas, as part of its efforts to go after financial crimes.

“We’re proposing the enhancement of investigating powers of AMLC. Particularly, we want our investigators and our office to have a subpoena power through the AMLC,” Matthew M. David, officer-in-charge of the AMLC Secretariat, said in a press chat at the central bank on Friday.

Aside from subpoena powers, the watchdog is also proposing amendments to the Anti-Money Laundering Act (AMLA) to include crimes related to tax evasion and terrorism financing.

In an e-mailed response to BusinessWorld, an AMLC representative said under current regulations, they cannot compel persons not covered by their jurisdiction to produce and submit information and documents.

“Currently, the AMLC investigates money laundering and terrorism financing and gathers evidence through inquiry or through requests for assistance from law enforcement,” the watchdog explained in an e-mail.

The AMLC said the law does not include tax crimes, which are among the designated category of offenses related to money laundering set by international standard-setting body Financial Action Task Force (FATF).

One of the recommendations under the Asia/Pacific Group on Money Laundering’s (APG) latest Mutual Evaluation Report is to amend legislation that will allow AMLC to have comprehensive investigative powers. These include allowing AMLC to “search, seize, take witness statements, and use special investigative techniques when conducting terrorism financing investigations.”

APG is the regional unit of the FATF.

“Failure to implement key recommended actions of the Mutual Evaluation Report will result to the Philippine’s automatic referral to the International Co-operation Review Group (ICRG) or to ‘gray-listing,’” AMLC said.

If a country is in the FATF’s gray list, it means it is considered as a high-risk and non-cooperative jurisdiction. The Philippines was previously removed from the FATF’s gray list in 2013.

In October, Bangko Sentral ng Pilipinas Governor and AMLC Chairman Benjamin E. Diokno said that the country is currently under a one-year observation period and is required to submit a report on the implementation of the recommendation.

“We cannot afford to have the Philippines in the FATF’s list of high-risk and non-cooperative jurisdictions. Hence, we should be very strategic in our focus for the next 12 months,” he said at that time.

The AMLC said amendments to the AMLA and the Human Security Act (HSA) should take effect by June 2020 “to provide enough time for the country to implement them before the 12-month observation ends in October 2020.”

AMLC has so far frozen over P1 billion worth of assets and seized P600 million from January 2018 to July 2019, in the course of investigations into money laundering and terrorist financing. It was in 2018 when the amended Implementing Rules and Regulations (IRR) of the AMLA were implemented. — Luz Wendy T. Noble

DoF finds ‘onerous’ terms in Chevron lease deal

THE Department of Finance (DoF) said on Tuesday that the lease contract between a unit of a state-led corporation and privately owned Chevron Philippines, Inc. contains “onerous” provisions as the oil firm is paying lower-than-market rental fees on a government property in Batangas.

In a statement, DoF said data from the National Development Co. (NDC) showed that Chevron had been paying a monthly rental fee of 74 centavos per square meter (sq.m.) on a 120-hectare or 1.2 million sq.m. property, or significantly lower compared with the monthly fair market rental value of P17.90 per sq.m.

“Under the terms of its lease contract with the NDC subsidiary Batangas Land Co., Inc. (BLCI), Chevron has been paying a miniscule rental fee to the government for the 1.2 million sq.m. industrial park in San Pascual, Batangas that it uses as an oil import terminal,” it said.

Finance Secretary Carlos G. Dominguez III, who is an NDC board member, described the deal as another “government contract with onerous provisions.”

It said the P10.66 million that Chevron pays yearly since 2010 accounts for just 4% of the suggested P257.76 million yearly payments if based on the current fair market rental rates.

Based on its assessment, the DoF said the property has a current market value of P4.9 billion to P5.3 billion. But Chevron has paid a total of P146.51 million for over 44 years from 1975 to 2019, which is around P3 million a year, in addition to real property taxes that the company pays under the agreement.

The payment translates to a rental yield of 0.2% of the property’s value, it said.

“Based on current standards that the state imposes on similar contracts, to have a rental yield of less than 1% is surely grossly disadvantageous to the government and the Filipino people,” Mr. Dominguez was quoted as saying.

Despite the increase in the yearly rental payments to P10.66 million starting in 2010, the amount is still “way below” market rates in the province, the DoF said.

“If the amount is adjusted to current fair market rates, the rental rate by now should be above P20 million a month or P257.76 million annually,” the statement added.

“We have to implement a totally transparent method of getting the best deal for the rental of all government property,” Mr. Dominguez told reporters in a Viber message Tuesday.

The DoF said that the supposed onerous items were found when the DoF-attached agency Privatization and Management Office (PMO) compared the lease terms of the BLCI-Chevron deal with the fair market value of the land in the Batangas area, based on NDC’s appraisal reports and the asset pool of the PMO.

A representative of Chevron, formerly Caltex (Philippines), Inc., said the company would issue a statement “once available.” — Beatrice M. Laforga

ALI says land deal ‘beneficial’ for UP but market fears persist

By Denise A. Valdez, Reporter

AYALA LAND, Inc. (ALI) said it is open for a probe of its contract with the University of the Philippines (UP) for the UP-Ayala Land Technohub project following allegations of underpayment by Malacañang.

In a statement late Monday, the property arm of the Ayala group said it “(welcomes) a transparent review and assessment of our partnership with UP” as it “(believes) this development has been fruitful and beneficial for UP, ALI and the community.”

Contrary to figures cited by Presidential Spokesperson Salvador S. Panelo that ALI is paying less than P20 per square meter (sq. m.) for its 25-year contract with UP, the company said UP will be getting P171 per sq. m. per month for the partnership.

The value comes from ALI’s P4.23-billion lease payment covering 25 years — P1.1 billion from 2008-2018 and P3.13 billion from 2019-2033 — and the P6 billion construction cost for the 16 commercial buildings within the complex. This is equivalent to a total of P10.23 billion payment from ALI to UP for the partnership.

Divided by the 20 hectares (200,000 sq. m.) that ALI said is “developable” within the 37-hectare Quezon City property where Technohub stands, and the 25 years (300 months) covered by the contract, the total payment is P171 per sq. m. per month.

“After 2033, UP as owner, will receive 100% of the buildings’ rent. UP also continues to own the land which has appreciated in value since the start of the partnership,” ALI said.

“Over the 25-year term of the lease, UP will receive the following: 1) lease payments and 2) buildings. This totals P171/sqm/month,” it added.

Despite the clarification, shares in ALI and its parent Ayala Corp. (AC) at the stock exchange continued slumping on Tuesday. Shares in ALI lost one centavo or 2.47% to close at P39.50 each, while shares in AC gave up 35 centavos or 4.67% to P715 each.

PNB Securities, Inc. President Manuel Antonio G. Lisbona said investors are worried other contracts between Ayala-led firms and the government will also be scrutinized. “If any more are found to be ‘onerous’, the company’s income could be threatened,” he said in a text message Tuesday.

AC’s water arm Manila Water Co., Inc. is also alleged by the government of having an onerous contract. A new contract is currently being drafted by the government.

“How long this will last is anybody’s guess at this point, unfortunately. You can bet though that all the business groups that have government contracts are now reviewing these carefully,” Mr. Lisbona added.

But for Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan, since much of the decline is brought by negative sentiment, he believes its impact on AC and ALI shares are short-lived.

“I think that would be temporary. Kasi kung makikita mo, Technohub, isa lang naman yan sa maraming projects ng Ayala Land [I think that would be temporary. Technohub is just one of the many projects of ALI],” he said in a phone call Tuesday.

Kung magkaroon man ng clarity on a compromise parang sa water… yun yung underlying catalyst for Ayala Land [If there will be clarity on a compromise like what was done for water concessionaires… that is an underlying catalyst for ALI],” he added.

Meanwhile, Presidential Legal Adviser Salvador S. Panelo said he would recommend the investigation of the contract between UP and ALI, adding that the deal is “onerous.”

In a television interview, he said he would be making the recommendation to President Rodrigo R. Duterte after ALI disclosed on Monday that UP will be receiving P10.23 billion by 2033 or 25 years after the company leased the property in 2008.

“I will recommend to the President pag-aralan natin ito mukhang kawawa na naman ang gobyerno dito (We need to study this because it appears that the goverment is again the aggrieved party in this),” he said.

“For 25 years I think they will be getting about P48 billion, while UP will be getting (P10.23 billion) according to them and you must remember that 25 years in a building, I think that should be demolished already. By that time, it is not that worth[y]. It is not that valued anymore,” Mr. Panelo said.

“Definitely lugi ang gobyerno dito (The government is on the losing end here),” he added. — with Gillian M. Cortez

JoyRide readies more bikers despite plan to stop motorcycle taxis

By Arjay L. Balinbin, Reporter

JOYRIDE is bent on deploying more bikers until it reaches the 10,000 cap despite the government’s plan to terminate the pilot program that allowed the operation of motorcycle taxis, an official of the ride-hailing firm said.

“We will await the final decision of the TWG (technical working group). In the meantime, we would like to continue to hasten the activation of our bikers based on the guidelines of the TWG so that we can serve the riding public until such time that we are told that this program will no longer push through,” JoyRide Vice-President for Corporate Affairs Jose Emmanuel “Noli” M. Eala told BusinessWorld late on Monday.

He was reacting to the announcement of the TWG on Monday that its members had agreed to terminate the pilot test, which was supposed to run until March.

JoyRide (We Move Things Philippines, Inc.) now 10,000 bikers, with 4,000 of them already on Metro Manila roads.

The termination comes after one of the motorcycle taxi firms filed a lawsuit questioning the TWG’s policy that limits the number of bikers in Metro Manila and Metro Cebu.

Transportation Assistant Secretary for Communications Goddes Hope O. Libiran told BusinessWorld in a phone message on Tuesday that the body will be meeting with stakeholders this week to hear their sentiments on the recommendation before it makes its final decision on the matter.

“We are yet to meet tomorrow to discuss, but we are considering the sentiments of the Senate and our stakeholders,” she said.

“If we will extend, we don’t want the atmosphere of cases to continue. Dapat sumunod sila sa cap and sa specified locations lang (They should follow the cap and operate only in specified locations),” the official added.

As for the latest number of JoyRide bikers, Mr. Eala said: “As of now, we have a total of 10,000 bikers registered with the TWG as required of us. Out of the 10,000 bikers that we have, 4,000 have already been activated. We are confident that we will be able to activate the entire 10,000 in the next four weeks.”

He said JoyRide’s daily passengers have been growing in number “exponentially.”

“We are happy to report that our numbers are very encouraging. We have increased the number of our passengers exponentially in the last four weeks,” he said.

He also said the company is hoping that the TWG would reverse its decision on the pilot program.

“We have always followed the guidelines of the TWG and, of course, we have invested substantially in this business, believing that there’s going to be a three-month pilot extension,” he said.

“We are hoping that the three-month extension will be continued, and we will run through the course because of the investments that have been made by JoyRide. But again, as we have already said and we have consistently mentioned, we will abide by whatever the rules given to us by the TWG. We are hoping that they will favorably consider continuing with the pilot implementation,” he added.

NLEX keeps top credit rating on fixed rate bonds

A TYPICAL section of NLEX near the Santa Rita interchange in Guiguinto. Street lights can be seen on the middle of a road from where a grass median was located before the widening project in 2016. — WIKIPEDIA.ORG

NLEX Corp. has maintained the highest credit rating given by a local debt watcher for its outstanding issuance worth P13 billion.

Philippine Ratings Services Corp. (PhilRatings) said in a statement yesterday it has again given NLEX Corp. a credit rating of “PRS Aaa” for its outstanding fixed-rate bonds.

The PRS Aaa rating is the highest PhilRatings gives to obligations that it believes have minimal risks. It means the issuer is perceived to have an “extremely strong” capacity to meet its financial commitments.

The rating given to NLEX Corp. was also given a stable outlook, which means the debt watcher expects it will not change in the next 12 months.

PhilRatings said to give the rating, it considered NLEX Corp.’s strong cash flow, conservative capital structure supported by retained earnings, well-managed toll franchise and resilient demand from the public for its services. But it also said political pressures that may cause further delays in the adjustments of its toll rates were accounted for.

“Traffic volume has consistently increased year-on-year, fueling the company’s revenues… This sustained profitability has translated to healthy cash flows and a robust equity base,” the debt watcher said.

It noted NLEX Corp.’s total revenues as of end-September 2019 stood at P11.2 billion, up 15% from in the same period in 2018. It added the company’s cash flow debt coverage ratio was “more than adequate” at 8.73x.

“The company has maintained a relatively conservative level of debt to finance its operations. Debt to equity ratio stood at 1.11x while its capitalization ratio was at 52.69% at the end of September 2019. These are seen to remain stable or even improve as NLEX Corp. continues to strengthen its equity position through retained earnings,” PhilRatings said.

NLEX Corp. currently operates the North Luzon Expressway and the Subic-Clark-Tarlac Expressway under concession agreements with the government, which supposedly guarantee periodic toll adjustments for the company. However, government approval on the increases are still pending.

But PhilRatings said despite this, NLEX Corp. is able to record a net income of P4.6 billion in the first nine months of 2019, growing 8% year-on-year. “(The company) has efficiently operated its concessions and completed expansion projects with the increase in traffic volume as its main revenue driver,” it said.

NLEX Corp. is under Metro Pacific Investments Corp., one of three Philippine subsidiaries of Hong Kong’s 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 an interest in BusinessWorld through the Philippine Star Group. — Denise A. Valdez

Gov’t makes partial award of 7-year bonds

THE GOVERNMENT made a partial award of its offer of seven-year Treasury bonds (T-bonds) yesterday as investors asked for higher rates.

The Bureau of the Treasury awarded just P27.203 billion via reissued seven-year T-bonds out of the P30-billion program, even if the total bids reached nearly twice the initial offer or P52.71 billion.

The papers fetched an average rate of 4.732%, 41 basis points higher than the 4.322% rate quoted during the auction on Oct. 29. If the offer was fully awarded, the papers would have fetched an average rate of 4.738%.

Deputy Treasurer Erwin D. Sta Ana said the turnout was good despite higher rates since the accepted rate of the securities were still within the prevailing rates at the secondary market.

According to the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s website, the seven-year bonds were quoted at 4.684% at the secondary market on Tuesday.

“It’s a good turnout. We were able to raise more than P27 billion in this auction. The approach of the auction committee was to award at a rate that is close to where the security is in the secondary market,” Mr. Sta. Ana told reporters after the auction.

Mr. Sta. Ana explained that the increase in rates were mainly due to inflationary concerns due to the Taal Volcano eruption, as well as risks to oil prices.

“We have observed that over the past couple of weeks, there has been an uptick in interest rates. The Treasurer mentioned yesterday the market may be pricing the inflationary impact of the Taal Volcano eruption. Of course there’s always that risk in oil, although now it is a little bit stabilized,” he said.

Sought for comment, a bond trader said the average rate seen for the bonds yesterday fell within market expectations.

“Interesting to note though that the total bids submitted was way over the offer volume of P30 billion, yet only P27.203 billion has been awarded. Looks like the other half of market participants wanted it to be within 4.8% or higher,” the trader said in a phone message.

Department of Finance (DoF) Secretary Carlos G. Dominguez III earlier said the inflationary impact of Taal Volcano’s eruption will likely be minimal as production of food in other regions can compensate for the supply.

However, for Jun Trinidad, economist at Philippine National Bank (PNB), the eruption could cause food prices to spike, especially on chicken and pork. He said January’s inflation rate can pick up to three percent from the 2.5% recorded in December.

Taal Volcano erupted on Jan. 12, forcing thousands of residents to evacuate their homes for safety. Ashfalls were felt in nearby areas and even in Metro Manila.

In a report, the National Economic and Development Authority (NEDA) said foregone income from Taal’s eruption could reach up to 4.314 billion, translating to 0.17% of the region’s economic output in 2018, with the largest losses to be incurred by the agriculture and fishery sector at P3.167 billion.

The Treasury has set a P420-billion local borrowing program this quarter, broken down into P240 billion in Treasury bills and P180 billion via T-bonds.

The government plans to raise P1.4 trillion this year from local and foreign lenders to plug its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — Beatrice M. Laforga

The characters of the big city

THE commute from EDSA to Manila took an hour on the day before the Traslacion — Manila’s giant celebration of the Feast of the Black Nazarene. It was past the lunch hour when I arrived at the 1919 Grand Café (in what was formerly the HSCB Building) in Manila’s Binondo district.

I got a table and rummaged through a set of 13 stickers which were the reason I had made the trip — to meet the artist behind them, freelance artist, designer, and animator Kenny Tai. One read: “There’s no business like the family business for the Binondo Girl. She works hard and drives a hard bargain all in the pursuit of prosperity, honor, and steamed pork buns.” The stickers feature cartoon girls who represent the cities or areas that they come from.

Ms. Tai showed me a sketchbook filled with the ideas behind her “Manila Girls” — among the sketches was “Tita Malate” with scenes of nightlife in Manila; “Mistress Parañaque” as a staffer in the entertainment city; “Little Miss EDSA” as the epitome of stress, hanging on to an MRT strap; and “La Muchacha España,” a college student in a seasonally flooded university belt.

“I am not talking about a ‘Manila Girl’ as ‘someone who lives in that city,’ it’s about the city becoming a character,” she clarified.

BEYOND KALESA POSTCARDS
The idea behind the stickers came about when she was travelling with friends and family in Europe and Asia between 2012 to 2013. During these trips, she observed that the souvenir items represent the culture and landmarks of the cities and countries — the Eiffel Tower in Paris, and the Japanese kokeshi doll, for example. Ms. Tai decided that she wanted to create a unique souvenir that showcases a different side of Manila beyond postcards of the Manila Central Post Office, a kalesa, jeepney, or “I Love (insert name of city)” shirts.

“When you see a souvenir, you remember a story from that product that you want to take home,” Ms. Tai told BusinessWorld.

Ms. Tai went on to develop several sticker collections under the brand name A.K.I.M. or Ang Kuwentong Inuwi Mo (The story you bring home) and started to sell them in art markets in 2016.

Her various sticker collections include Que Horror, Trapik Propaganda, and The Year of the Rat (for the 2020 Lunar New Year).

Many of the designs, Ms. Tai explained, are inspired by good and bad news, historical documentaries, conversations with friends, online memes, and articles she read on the internet.

MANILA GIRLS
A long-time resident of Binondo, Ms. Tai flipped through the pages of her sketchbook looking for the first “Manila Girl” — appropriately a Binondo girl — who sits on a Chinese lantern while eating siopao.

But these are not your regular sexy pin-up girls. While there are some that could fit the stereotype like the club-going “Makati Girl” in her miniskirt, cellphone, and cocktail, there is also the hefty “Divisoria Girl” whose muscular arms hold up multiple shopping bags; the pregnant “Malate Girl” mournfully singing karaoke in a bar; and the astig “Tondo Girl,” short-haired, riding a motorcycle, and wielding a gun. This is social commentary on an art form that can be dismissed by older generations but which has become very popular among the young.

To come up with her illustrations, Ms. Tai does research on the specific places she is focusing on, including the place’s urban structure and architecture.

Ms. Tai said that trips around the city while running errands also serve as an important reference for the designs. “I walk around the city and I also watch people,” she said.

In June 2017, Ms. Tai attended the late Carlos Celdran’s “Walk This Way” Intramuros tour — she gave the cultural activist and artist her first batch of postcard-sized stickers which, Ms. Tai noted, was very much appreciated.

Ms. Tai’s participation in Mr. Celdran’s tours gave her a deeper understanding of the city and eventually led to their first “Manila Girl” sticker collaboration — “Nuestra Chica de Intramuros,” a girl dressed in a long skirt with background images of nilad flowers, a canon, a kalesa, and the facade of Fort Santiago, in 2018.

The stickers evolved to include Ms. Tai’s original poems at the back while Mr. Celdran contributed small drawings and also served as her text editor.

“[Then] it was not really work. It was more… for fun,” Ms. Tai said of their collaboration which continued even after Mr. Celdran moved to Madrid last year. “I think it was good for him, since he missed Manila a lot.”

Unfortunately, their collaboration concluded with Mr. Celdran’s demise in October 2019. Their final collaborative design was “Lady Escolta,” a girl in a white suit holding a bottle of liquor, with the heritage architecture of Manila’s former commercial center in the background.

Ms. Tai admitted to having received many requests and suggestions for the next “Manila Girl.” However, it takes “one research at a time.”

Through time, the metropolis changes with new developments and the administrations that run the various cities that make up Metro Manila. “‘Manila Girls’ will also change, because Manila is changing,” Ms. Tai said.

“[If] there is news about a drastic change of a certain city, eventually, I would have to change it up,” she said of her sticker. “But I will not forget the past version of it,” she said before we left the café and walked to the HUB Make Lab on nearby Escolta St. where the stickers are sold.

As for the 14th Manila Girl, I messaged the artist with a question I forgot to ask, on the train going home: “Which city are you working on next?”

Just like one’s travels around Metro Manila, she replied: “Let’s keep it in suspense.”

The Akim stickers will be available at the Sticker Con MNL 2020 on Feb. 29 at the Bayanihan Center in Pasig City. They are also available at the HUB Make Lab at the First United Bldg., 413 Escolta St., Binondo, Manila. For more information on Akim, visit https://www.facebook.com/akim.63/ or Instagram @akim.63. — Michelle Anne P.Soliman

Mondelēz invests in recyclable packaging facility

MONDELĒZ Philippines, Inc. looks to showcasing the results of its Parañaque-based recycling facility to Metro Manila local government units for possible replication.

Kristoffer M. Rada, Mondelēz Philippines country manager for corporate and government affairs, said the company invested P2 million on a shared facility that creates parking bumpers and tactile paving from recycled packaging.

“Together, with that pool of money we have invested in that recycling facility in Parañaque — that hopefully will be a showcase of what we can do with recycled materials… and if it’s effective then we’ll roll it out, hopefully, to two more areas.”

The project is in partnership with members of the Philippine Alliance for Recycling and Materials Sustainability. An engineering firm is currently testing the durability of the pilot products.

“Our hope is if it does get to gain momentum, and it gets to a point where it does produce viable products, then we can showcase this to the LGU of Quezon City, Makati, Taguig — and hopefully they can replicate it.”

He said local food manufacturers should make packaging recyclable as there is no existing facility in the Philippines that has the capacity to recycle all the products.

“Even if we do our part, that might stop at some point because the end-point, which is the recycling facilities, aren’t there yet. So we have to invest in recycling facilities,” he said.

Construction of the Parañaque facility began in 2017, and production of pilot products began last year.

“This year, hopefully, we’re looking at a more ramped up production,” Mr. Rada said.

In keeping with a global target of making 100% of its packaging recyclable by 2025, Mondelēz Philippines’ packaging from its local manufacturing plant is 98% recycled or recyclable.

The remaining 2% is composed mostly of multi-layer plastic packaging for which Mondelēz has not found a suitable alternative for.

“It will take some time, but we’re confident we’ll be able to meet our targets by 2025.”

Mr. Rada said the company is not rushing to find a solution just yet, as they prioritize protecting and preserving their products. — Jenina P. Ibañez

Bank of Japan stands pat on rates, raises economic growth forecasts

THE BANK OF Japan (BoJ) took a brighter view of the economy and left its main policy settings unchanged Tuesday, offering a further indication that it is unlikely to add to its stimulus.

As had been widely expected, the BoJ raised its growth projections for the first time in a year, thanks to Prime Minister Shinzo Abe’s $120-billion economic package, unveiled last month. But the bank also trimmed its inflation forecasts, a move that may raise fresh questions about how economic growth feeds into prices at a time when central bankers around the world are reassessing their targets, methodology and wider issues.

The stand-pat decision came ahead of meetings by the European Central Bank (ECB) and the Federal Reserve this week and next. The ECB is expected to launch a year-long examination of its inflation target and wider themes such as inequality and climate change. The Fed already has a broad-ranging review under way.

All three central banks are seen sticking to a holding pattern for the time being amid signs the global economy is past the worst of a slowdown.

Since the BoJ’s previous meeting in December, the US and China have signed off on a phase one trade deal removing for now one of the biggest uncertainties on the horizon for the economic outlook. The yen has also weakened against the dollar, falling last week to eight-month lows after a short-lived surge at the start of January.

The central bank said that while overseas risks to the economy remained significant, they had decreased somewhat. It said it wouldn’t hesitate to take additional easing action if risks increased.

“The BoJ is trying to avoid sending a message that it’s getting confident about the economy or it’s starting to seek adjustments to its easing bias,” said Nobuyasu Atago, chief economist at Okasan Securities and former head of the BoJ’s price statistics division. “The bottom line is that the BoJ is comfortable with the current yen level and it doesn’t want to change that by indicating optimism or a change in its cautious view.”

While Japan’s economy is expected to have contracted sharply in the last three months of 2019 following a destructive super typhoon and a sales tax hike that cooled spending, the trajectory for this year now looks less gloomy. A slump in overseas demand may have bottomed and the Abe administration’s stimulus is set to give the economy a shot in the arm.

The fiscal injection looks sufficient to help get growth back on track this year and remove the need for additional action by a central bank already stretched close to the limits of its policy toolkit and facing mounting costs of its easing program. The BoJ now projects the economy to expand 0.9% in the year starting in April, compared with a 0.7% forecast in October, citing the impact of the government’s measures, but expects inflation of only 1%, down from its previous projection.

The BoJ’s upgraded growth forecast positions it between the view of private economists and the more optimistic 1.4% projection of the government. Still, economists cast doubt on how growth can strengthen while prices weaken.

“If you take a step back, they are forecasting inflation of only 1.4% even in fiscal 2021. That’s very weak after years of massive easing and I think it’s coming to a stage where they need to rethink the price target. I wouldn’t be surprised if that discussion takes place this year as the Fed and ECB are also discussing theirs,” Mr. Atago said.

EASING STANCE
As the year progresses the focus is likely to shift to when the BoJ will step back from its bias toward easing to a more neutral stance, assuming no events derail the recovery. The change in guidance would be a necessary move toward contemplating an eventual normalization of policy. Most economists surveyed by Bloomberg now expect the bank’s next move to be in the direction of tightening, though the likely horizon for that would be next year.

If the global economic bottoming continues, the BoJ may be able to reverse its easing tilt, but that depends on how the Fed moves first, and whether reversing its stance would affect the yen significantly, said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.

Mr. Abe has also helped the BoJ’s circumstances by playing down the significance of continued feebleness in price growth. While movements in inflation were previously seen as potential triggers for policy action, government pressure on the central bank to achieve its 2% price goal has dissipated considerably. The prime minister didn’t even mention deflation in his inaugural speech at the start of this year’s parliamentary session on Monday.

Mr. Abe has likely calculated that calling for higher inflation risks a public backlash after the government forced up prices with the sales tax increase in October. — Bloomberg

Mr. C’s tunes: from sheet music to an exhibition

VISUALIZING music is quite a challenge. But it was a challenge that was accepted by the The Center for Campus Art of the De La Salle-College of Saint Benilde, the result of which is Kay Ganda Ng Ating Musika: An Exhibit on the Life and Work of National Artist for Music Ryan Cayabyab, its third exhibit featuring National Artists and the its first focusing on music.

“[Ryan] Cayabyab is a very busy man. We were only able to talk to him once,” exhibit co-curator and Center for Campus Art (CCA) director Gerry Torres told BusinessWorld. Aside from meeting with the composer, research was done, including interviews with the artist’s colleagues.

Co-curated with former music production chair and current faculty member Aji Manalo, together with faculty members Alwyn Cruz and Ces Disini-Pitogo, the exhibit presents milestones of Mr. Cayabyab’s life and career as a composer and musical director, as well as his works in theater, movies, and television.

MR. C
Raymundo Cipriano Pujante Cayabyab earned a degree in music from the UP College of Music, where he also became a full-time professor at the Department of Composition and Music Theory. In 1978, Mr. Cayabyab won the grand prize at the Metro Manila Popular Music Festival with the song “Kay Ganda ng Ating Musika.” Today he is the executive director of the Philippine Popular Music Festival (Philpop), an annual songwriting competition.

“Mr. C — as he is fondly called by friends and colleagues — explored and developed the Pinoy sound, along the way elevating our musical taste and convincing us that Filipino music is at par with the world,” Mr. Torres said in a speech at the exhibit launch on Jan. 16.

“When Mr. C was bestowed the National Artist award, I thought it was essential for an exhibit on the genius of Reymundo Cipriano Pujante Cayabyab — composer, arranger, pianist, conductor, singer and educator — be produced for Benilde. I knew that his music, testaments to outstanding Filpino talent, and his work ethic will serve as inspiration to our young designers, artists, and musicians,” he added.

THE EXHIBIT
The school’s SDA Gallery features a timeline Mr. Cayabyab’s life and work presented through text, images and videos; tapestries and lounge chairs by architecture and interior design students which are interpretations of the maestro’s songs; printed song lyrics with QR codes leading to music or lyric videos on YouTube; and a karaoke room with a playlist including Cayabyab’s songs including “Paraisong Parisukat” (1977), “Tuwing Umuulan at Kapiling Ka” (1978), “Sino ang Baliw” (1981), and “Araw Gabi” (1985).

The black and white motif of the exhibit, Mr. Torres noted, is inspired by the color of piano keys.

“Music is an extension of [Mr. Cayabyab]’s being. He has mastered the art to the point that he is able to mirror his own persona along with it,” exhibit co-curator and music production faculty member Aji Manalo said.

That evening, students of the music production program and Mr. Cayabyab’s colleagues performed his songs.

By the end of the program, Mr. Cayabyab spoke, noting that music is like writing. “Walang tigil ’yan (It does not stop) until you distill the right things — the right sound, balance, texture, [and the right] dynamic,” he said.

Mr. Cayabyab was named the National Artist for Music in 2018, and received the Ramon Magsaysay Award in September 2019. For the 30th edition of the Southeast Asian Games, he composed the theme song, “We Win as One,” with lyrics by playwright Floy Quintos, and performed by Lea Salonga.

For the maestro, the awards and recognition is a reason to continue the work. “That’s why, I have to write more compositions,” Mr. Cayabyab told BusinessWorld at the end of the program.

The CCA has previously held exhibits on National Artists Ramon Valera, Lino Brocka, and Ishmael Bernal; and hosted exhibits featuring the work of National Artists Manuel Conde, Carlos “Botong” Francisco, and Salvador Bernal.

Kay Ganda Ng Ating Musika: An exhibit on the Life and Work of National Artist for Music Ryan Cayabyab runs until April 14 at the 12/F Gallery of Benilde’s School of Design and Arts. It is open from 10 a.m. to 9 p.m. on weekdays, and 10 a.m. to 6 p.m. on Saturdays. — Michelle Anne P. Soliman