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SMIC profit surges 26% to P33B

SM INVESTMENTS Corp. netted P33.1 billion in the first nine months of 2019.

SM INVESTMENTS Corp. (SMIC) reported a 26% growth in consolidated net income in the first nine months of the year, thanks to strong profits of its units led by BDO Unibank, Inc.

The holding firm of the Sy family posted a net income of P33.1 billion as of end-September, up 26% from a year ago.

This was driven by a 14% increase in revenues to P350.7 billion, as its business groups delivered positive results for the nine-month period.

The company did not disclose third-quarter results.

The banking business accounted for 44% of SMIC’s reported net profit. BDO’s earnings surged 49% to P32.1 billion, while China Banking Corp.’s income increased 21% to P6.7 billion.

Meanwhile, the property segment recorded a consolidated net income of P27.6 billion, 18% higher from last year. The segment, which is operated by SM Prime Holdings, Inc., also saw 14% higher revenues at P85 billion.

The growth came mainly from the sustained performance of its mall business, whose revenues grew 8% to P42 billion in the nine-month period. SM Development Corp.’s reservation sales also increased 26% to P31.9 billion.

The retail business, under SM Retail, Inc., saw a net income of P7.8 billion, lower by 1% as a result of the implementation of the Philippine Financial Reporting Standards (PFRS) 16 which took effect this year. “Excluding the impact of PFRS 16, net income grew by 8%,” SMIC said.

SM Retail’s revenues rose 12% to P253.9 billion during the nine-month period. The business segment covers the food and non-food business of the SM group, which are both under SM Retail, Inc.

Total stores of SM Retail stood at 2,693 at the end of September, comprised of 64 The SM Stores, 1,565 specialty retail stores, 58 SM Supermarkets, 51 SM Hypermarkets, 199 Savemores, 56 WalterMarts and 700 Alfamart stores.

“Our core businesses continue to deliver notable performance led by banking and property. We are satisfied with our financial results as these reflect the continued growth in our core businesses,” SM President Frederic C. DyBuncio was quoted as saying in a statement.

Shares in SMIC fell 34 points or 3.12% to close at P1,057 per share on Wednesday. — Denise A. Valdez

AEV Q3 profit dips as power unit falls

By Victor V. Saulon, Sub-Editor

ABOITIZ Equity Ventures Inc. (AEV) posted a 6% drop in third-quarter net income to P6.8 billion as its power business segment, the biggest contributor to its bottom line, recorded a double-digit profit fall during the period.

“Despite challenges in our power business, better operating performance in our non-power businesses provided resilience to our investment portfolio. As we fund our growth projects, we look to further broaden and strengthen our diversification in the Philippines and overseas,” said Erramon I. Aboitiz, AEV president and chief executive officer.

During the July to September period, the holding firm also recognized a non-recurring loss of P234 million in unrealized foreign exchange losses, reversing the P60-million gains in the same period a year ago.

Without the one-time losses, AEV said its core net income was down by 2% to P7 billion. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter rose by 4% to P18.3 billion.

Aboitiz Power Corp. recorded a 36% decline in its third-quarter income to P4.8 billion after recognizing non-recurring losses of P340 million, bigger than the P326 million one-off losses a year ago.

AboitizPower’s core net income fell by 35% to P5.1 billion because of lower EBITDA, interest expense from the bonds issued in October 2018, and take-up of interest and depreciation expenses from Hedcor Bukidnon, Inc. and Therma Visayas, Inc.

“It has been a tough year for AboitizPower with the supply issues that resulted in the high cost of replacement power for our customers. The company has also generated lower revenues from the spot market due to challenges that caused some of our power plants to shut down,” said Emmanuel V. Rubio, AboitizPower chief operating officer.

“Despite this, our customer base continues to grow, which underscores the consumers’ trust and confidence in AboitizPower. Moreover, we remain confident that with our incoming capacities, we will surpass our 2020 target of 4,000 megawatts attributable capacity, ensuring sustainable growth for the company, our shareholders, and the customers and communities we serve,” he added.

For the nine months to September, AEV recorded a 9% drop in its net income to P15.7 billion after recognizing non-recurring losses of P155 million, representing net foreign exchange and derivative losses.

Although lower than the previous year’s P407 million, the one-off losses weighed down its core net income by 10% to P15.9 billion. AEV’s EBITDA was also lower by 2% to P44.8 billion.

Power made up 60% of the total income contributions from AEV’s strategic business unit. Financial services, food, real estate, and infrastructure units contributed 25%, 6%, 5% and 4%, respectively, to the total income.

As of end-September, AboitizPower’s income contribution was down by 19% to P10.4 billion, while on a stand-alone basis, its core net income dropped by 26% to P13.7 billion. Including non-recurring losses of P220 million, net income was P13.5 billion, 19% lower compared with the level a year ago.

The generation and retail electricity supply made up 80% of the contributions from the business segments, although the figure was down 18% to P12.6 billion.

Consolidated EBITDA fell by 13% to P28.7 billion, driven by the higher volume and cost of purchased power, lower spot market revenues, and lower plant availability.

Power capacity sold during the period went down by 1.5% to 3,123 megawatts (MW) from 3,169 MW a year ago because of lower energy availability. The power distribution business accounted for 20% or P3.1 billion, although lower by 6% compared with a year ago.

Meanwhile, Union Bank of the Philippines’ income contribution to AEV rose by 41% to P4.2 billion. On a stand-alone basis, the bank and its subsidiaries recorded a net income of P8.5 billion, 40% higher from a year ago, due to the strong revenues from the sustained double-digit growth in earning assets and strong trading gains.

AEV’s non-listed food subsidiaries contributed P1 billion to AEV, down by 31% from the previous year. These units are Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and AEV International Pte. Ltd.

AboitizLand, Inc., which is also not listed, along with its subsidiaries recorded a net income of P829 million or more than double the previous year due to the fair valuation gains on investment properties, which were not present a year ago.

For the infrastructure group, Republic Cement & Building Materials, Inc.’s income contribution to AEV amounted to P631 million, nearly three times the previous year, because of the improved controls on production costs, increased private sector demand, and the completion of several debottlenecking projects.

On Wednesday, shares in AEV fell by 3.89% to P54.40 each, while those of AboitizPower slipped by 3.09% to P39.15 apiece.

New Greenhills hotel is prototype for other Summit properties

THE SIXTH Summit Hotel has opened its doors in the bustling city of San Juan, ideally located near the famous Greenhills Shopping Center and near enough (traffic permitting) to city centers like Cubao, Ortigas, and Makati. But what sets Summit Hotel Greenhills apart from other locations is that it is a symbol of what soon will be trademarks of the Summit Hotel brand.

One of those is Café Summit, an all-day dining restaurant serving “comfort food with a twist,” according to a press release. Yes, we’ve heard this phrase one too many times but what makes Café Summit different is that “comfort food” includes Mexican flavors that the executive chef is fond of and local Filipino favorites.

The restaurant seats 80 people comfortably, with a small private dining area at the side for up to 20 people. Café Summit also features an open kitchen system so diners can watch their dishes being prepared.

“I would define my cooking style as eclectic. I kind of touch on everything. Nothing that we prepare here is just fast, everything takes quite a few days. So there’s really a lot of intense work to prepare each ingredient,” Daniel Lachica, the hotel’s executive chef, was quoted as saying in a release.

During a media visit in October, Mr. Lachica said that while his father is Filipino, he lived with his mother who is Italian-American so he didn’t grow up cooking Filipino flavors. It was only when he decided to visit his father’s hometown in Aklan that he became acquainted with Filipino cuisine.

The result of this are his versions of local cuisine which are served in Café Summit. His Adobowl, for instance, is his version of adobo (a meat dish stewed in soy sauce and vinegar) where he uses roasted tomatoes and pork floss to elevate the flavors. The result is something familiar and unfamiliar at the same time because, on one hand, you taste the requisite salty and sour umami of the adobo while on the other you’re enjoying the texture of pork floss and the sweetness of the tomatoes.

Another standout on his menu are the Biang Biang noodles with spiced lamb or stewed pork belly options. The noodles come from the Shaanxi province in China and are known for their length (and width) — they are almost reminiscent of a belt. Mr. Lachica said that it’s something that’s becoming popular overseas, but he noticed that it’s very rare to come across this dish in the Philippines and he wanted to add something to the menu that would be different from what the nearby Chinese restaurants are serving. (Note: The hotel is located directly across Choi Garden.)

And it is different: the noodles, which Mr. Lachica said are made and cut in-house, are chewy (and a choking hazard if you decide to slurp one in) and work really well with the spices in the meat. The lamb is spiced with cumin alongside other spices giving it a Mediterranean flavor profile, but then you’re brought back to Asia with the black vinegar and soy sauce base of the noodle sauce. The dish is a worthwhile journey to make.

During the visit, we were also given the chance to taste his Chicken tortilla soup and Falafel salad. The soup became an instant favorite at the table — the roasted tomatoes, shredded chicken, and the usual Mexican cuisine accouterments like cilantro and lime, resulted in a soup with well-balanced flavors and rich enough to satisfy but not so heavy that one wants to skip the main courses after. The falafel salad with the creamy harissa (African chili pepper paste) was also a winner, with the falafels perfectly sized and cooked as an accompaniment to the salad greens.

Of course, what is a restaurant without its signature dish? For Summit Café in Greenhills, that dish is the Calamansi cheesecake which Mr. Lachica said has became a favorite among the diners in the restaurant.

“My father’s family lives in Aklan and we would go down to Boracay for vacation and every time I’m back in Manila I always think about the Calamansi muffins (from Real Coffee and Tea Café) so I set out to do a cheesecake version,” Mr. Lachica told the reporters.

The sour, yet not overbearingly so, calamansi worked really well with the soft cheesecake texture and its sweetness blunted much of the fruity sourness of the local lime. It’s simple but it packs a punch.

SUMMIT CAFÉS IN OTHER HOTELS
Soon, there will be Summit Cafés in other properties and while there will be differences in their menus, Mr. Lachica said the team “wants to be consistent in a way that we keep the same attitude in our dishes.”

“We want to connect with the locals… so [while we’ll have] items consistent [throughout] the properties, there will be specialties coming from the locals,” he was quoted as saying in the release.

He added that they are trying to become sustainable by getting as much of their ingredients from the areas they are located in.

In the interest of uniformity, all the soon-to-be-opened Café Summits will have similar interiors which are upscale but still comfortable and non-intimidating.

HOTEL OF FIRSTS
Aside from the hotel group’s restaurant brand, Summit Hotel Greenhills started to deploy sustainability efforts which will be copied in other properties. That includes eliminating single-use plastics by putting two water dispensers on each floor and pitchers in each of the 100 rooms.

In-shower dispensers for shampoo and soap are also provided.

“The hotel is expected to save up to 5,000 plastic water bottles a month and an average of 1,000 pounds (roughly 454 kilos) of plastic a year from toiletries,” the release said.

The hotel is also the first to introduce the self-check-in system, according to hotel General Manager Katrina Lardizabal. This allows visitors to check-in using their reservation code and create room keys themselves for a more fluid and seamless process.

Summit Hotel Greenhills is located at 13 Annapolis St., Barangay Greenhills, San Juan City. For reservations, visit summithotels.ph.

Summit Hotels also has properties in Quezon City (Summit Hotel Magnolia), Tagaytay, Naga, Tacloban, Summit Circle Cebu, and Summit Galleria Cebu. — Zsarlene B. Chua

Citigroup looks to expand branches

CITIGROUP, Inc. said it is open to expanding its branch count. — WIKIPEDIA.ORG

CITIGROUP INC. might be getting in on the branch expansion game.

The bank is open to adding branches in cities where it has a high population of cardholders and where its largest co-brand card partners are based, Anand Selva, the head of the lender’s US consumer unit, told investors at a conference on Tuesday. He presented a slide show illustrating the firm has a high concentration of cardholders and ATMs in states such as Texas, North Carolina and Ohio.

“We are open to adding physical distribution but we want to do it where we start to see concentration of client activity outside our existing markets,” Selva said. “It will be about going to where our customers already are.”

The move is part of Citigroup’s push to offer more banking products to the customers in its cards business, the second-largest in the country. The firm has been offering rewards like airline miles and credit card points to card customers who also open a bank account at Citigroup.

Lenders including Bank of America Corp. and JPMorgan Chase & Co. have been opening branches to boost deposits in new markets. Citigroup has long had the smallest footprint among the biggest US consumer banks, with 687 branches across the six metropolitan areas of New York, Chicago, Miami, Washington, D.C., Los Angeles and San Francisco. — Bloomberg

Mati’s Kuzina Virginia serves up Mandaya cuisine

By Maya M. Padillo, Correspondent

MATI CITY, Davao Oriental — A new restaurant here, Kuzina Virginia, is serving up traditional dishes of the Mandaya, an indigenous group in the province known for their colorful attire and beadwork.

Travel and tour operator Angie M. David, whose mother Virginia runs the simple dining spot built using coconut and bamboo materials, said their aim is to highlight Mandaya cuisine and make it as much of a tourist attraction as Mati’s Dahican Beach, Pujada Bay, and empanada.

“We know Mati is also popular for empanada (filled pastries) but it is not a meal. That is why we conceptualized this restaurant. Most of the travelers will ask for local food and I want to make this, to bring people, have a taste and experience the Mandaya food,” Ms. David said in an interview where she was proudly wearing a Mandaya-inspired top and long skirt.

“My mother is a Boholana (from the province of Bohol) but my grandmother, who is a Serrano, is a Mandaya,” she said.

The basic Mandaya ingredients are coconut and camote (sweet potato), both found in abundance in Davao Oriental. Ms. David said these two are almost always present at a Mandaya dinner table.

When starting off with a drink, Kuzina Virginia offers a slightly alcoholic shake which is spiked with tuba (coconut wine).

For main dishes, there’s banami — shrimp wrapped in banana leaves and pan-grilled, a common Mandaya way of cooking.

Ms. David said shrimp is also a growing agricultural sector in the province, with more than a 100 farms now operating.

“Most of our food comes from the products we have here in Mati, Davao Oriental,” she said of the items offered in the restaurant.

And there’s L’lulot, a dish cooked inside a piece of bamboo, locally referred to as lut.

Rice and meat — either pork, chicken, or shrimp — are stuffed inside a piece of bamboo along with coconut milk, ginger, onions, and garlic, then stuffed bamboo is then cooked over an open fire for up to four hours.

“You have to order it ahead of time because lut is a labor of love and we have to cook it within three to four hours. We have to buy the lut every other day because the bamboo can be used only within 24 hours — beyond that it does not taste nice kasi wala na yung (because it loses the) moisture. The bamboo stalk… must not be too young or too old,” Ms. David said.

The paru-paru de baga, meanwhile, uses beef innards, similar to the popular Filipino dish bopis, which is usually made from pork offal.

“It’s spicy because Mandayas love spicy food… people in Davao Oriental love chili and always ask for chili,” she said.

Kuzina Virginia also offers more typical Filipino dishes such as a platter of seafood, with crabs, squid rings, and of course, shrimp.

To cap off the meal, there’s pudding de Mati for dessert which has coconut meat strips, and “coffee” made from corn.

Ms. David said being in the travel industry, she understands the value of promoting everything local, which is also what visitors crave for.

“I am now in the travel industry so I wanted to come up something that is very authentic, very Mandaya, and very Mati,” she said.

Mati City, the capital of Davao Oriental, is about 180 kilometers from Davao City, where the region’s international airport is located.

BoJ debated feasibility of more easing in September

THE BANK of Japan discussed more stimulus in their September meeting. — WIKIPEDIA.ORG

TOKYO — Bank of Japan (BoJ) board members debated the feasibility of ramping up stimulus at their September rate review, with some calling for the need to start brainstorming ideas to top up monetary support, minutes of the meeting showed on Wednesday.

Underscoring a lingering rift within the nine-member board on the next step, however, some members warned that more attention was needed on the demerits of prolonged ultra-low interest rates such as the impact on bank profits.

“A comprehensive examination was needed on the chance that financial institutions’ profitability will decline further, and an increasing number of them would take excessive risks,” the minutes quoted some members as saying.

At the September meeting, the BoJ kept policy steady but signalled the chance of near-term easing by issuing a stronger warning against overseas risks. It held off on expanding stimulus at a subsequent rate review in October.

Despite the decision to keep policy steady, many on the board voiced concern over the fallout from Sino-US trade tensions and slumping global demand, the minutes showed.

“There’s a risk a delay in pick-up of overseas growth could hurt Japan’s economy and prices. As such, the BoJ must start examining a desirable policy response, with an eye on the potential side effects,” one member was quoted as saying.

Another member also said the BoJ must consider “all possible policy measures without preconception” as the economy could already be losing momentum towards reaching the central bank’s inflation target of 2%, the minutes showed.

One board member was more explicit regarding what the most effective means of easing could be. “There was relatively large room for monetary easing among yields in the short- to medium-term zone, and lowering the short-term policy interest rate was deemed appropriate,” the member was quoted as saying.

Under a policy dubbed yield curve control, the BoJ pledges to guide short-term rates at -0.1% and the 10-year government bond yield around 0%.

The BoJ is in a bind. Years of heavy money printing has failed to fire up inflation, forcing the central bank to maintain a massive stimulus despite rising costs, such as the hit of near-zero rates on financial institutions.

Slowing global growth and trade tensions also cloud the outlook for Japan’s economy, adding to the dilemma for policy makers relying on a dwindling tool-kit. — Reuters

MPIC books P11.8-B profit in nine months

By Denise A. Valdez, Reporter

EARNINGS of Metro Pacific Investments Corp. (MPIC) slipped in the nine months to September, weighed down by higher interest costs as the peso strengthened during the period.

The listed infrastructure conglomerate said its consolidated reported net income attributable to owners of the parent company dropped 5% to P11.80 billion during the January to September period. This was attributed to non-recurring expenses of P695 million compared to last year’s gain of P297 million.

“That swing is principally due to foreign exchange translation movements… When the peso weakens, we have a gain. And when the peso strengthens, the foreign assets will tend to be adjusted,” MPIC President and Chief Executive Officer Jose Ma. K. Lim said at a briefing in Makati City.

The higher expenses offset the 9% rise in operating revenues to P66.6 billion as of end-September, while cost of sales and services rose 5% to P32.6 billion.

Nine-month consolidated core income jumped 2.5% to P12.5 billion, “lifted by improved financial and operating results of constituent companies, which translated into a 6% increase in operating contributions: substantial core net income growth from Manila Electric Company (Meralco); higher volumes and tariffs at Maynilad Water Services, Inc.; continued traffic growth in domestic toll roads; and strong in/out patient numbers at hospital — all of which combined to offset higher interest costs.”

System-wide revenues, including Meralco, reached P320.3 billion, up 6%.

For the January to September period, the power business contributed P8.95 billion in core net income, up 5% thanks to Meralco.

Meralco reported a 11% rise in core income to P18.5 billion, driven by the higher energy sales and lower borrowing costs. Global Business Power Corp.’s core profit was flat at P2 billion, as volume sold dropped 4% due to the end of several short-term power supply deals.

The tollroads segment, under Metro Pacific Tollways Corp., recorded a 13% rise in core income to P3.69 billion during the nine-month period. This was due to toll rate adjustments that have been implemented since March, on top of higher traffic in domestic roads. MPTC’s system-wide vehicle entries averaged 923,912 a day in the nine-month period, compared to 916,879 during the same period last year.

The water business recorded a 4% rise in core net income to P3.18 billion, mainly from the operations of Maynilad Water Services, Inc. Maynilad core income climbed 6% to P6.5 billion during the period, “driven by revenue growth partially offset by increased concession amortization and provision for taxes.”

The hospitals business, operated by Metro Pacific Hospital Holdings, Inc., posted an 18% gain in core income to P681 million as it saw a 10% rise in outpatient visits and 6% increase in in-patient admissions during the period.

MPIC’s rail business, through Light Rail Manila Corp., recorded the biggest jump in core income at 25% to P224 million. This came from the average daily ridership of 445,373 during the nine-month period, peaking at 596,500 riders.

MPIC Chairman Manuel V. Pangilinan said the company expects its operating results to improve moving forward due to the P35.3-billion investment its hospital business received last month.

“[T]he improvement in our operating results has been reduced by higher interest costs. Moving forward this will be ameliorated by the benefit of our recently announced transaction for the hospitals business. The process of raising funding for MPIC is continuing with further portfolio rationalization to be announced in the coming months,” Mr. Pangilinan said in a statement.

“At this stage I expect our full year core income to be moderately ahead of 2018. Our absolute focus in the near-term is to raise liquidity to reduce our debts and our financing cost, and over the medium term to continue to build out the many new infrastructure assets we are currently working on. Clearly, our goal is to enhance profitability, earnings per share, and the Net Asset Value of MPIC,” he added.

The company did not disclose third-quarter figures.

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

Shares in MPIC dropped 0.20 point or 4.04% to close at P4.75 each on Wednesday.

Lee Kum Kee chooses two winners for HK food tilt

TWO CHEFS will represent the Philippines in the International Young Chef Chinese Culinary Challenge (IYCCCC) in Hong Kong next year. Michael Lee Avisado of Vikings Luxury Buffet bagged gold while Muhajiran Ijiran III of Manila Commisario took silver in the local qualifying round. They will join around 50 young chefs from over 20 countries at the international championship.

Lee Kum Kee — the inventor of oyster sauce and a globally renowned Chinese sauce and condiment manufacturer — hosted this year’s first qualifying contest at the Magsaysay Center for Hospitality and Culinary Arts on Oct. 30.

The IYCCCC, which started in 2014, is a biennial contest that provides international exchange platform for the Chinese culinary industry. It aims for young chefs to learn and “promote the inheritance of Chinese culinary skills and sustainable development of the Chinese culinary industry.”

“With the mission of ‘Promoting Chinese Culinary Culture Worldwide,’ Lee Kum Kee is committed to nurturing Chinese culinary talents worldwide. The IYCCCC is an optimal platform for young Chinese chefs from around the world for culinary exchange,” Lee Kum Kee managing director South Asia Leslie Lau said in a press release.

During the competition, 10 chefs (divided into two batches) were tasked to draw which protein (shrimp, beef, pork, chicken) they would prepare as their dish; both batches were given an hour to cook and present their dishes.

Aside from a medal and certificate, Mr. Avisado also won P25,000 and P10,000 worth of Lee Kum Kee products; Mr. Ijiran III won P15,000 and P5,000 worth of Lee Kum Kee products.

Other awardees include: Elier Maghanoy (King Chef Seafood Restaurant), Jefferson Palma (King Chef Dimsum Kitchen), Janin Jayco (U-Rack Bar-B-Q & Wings) who each won the bronze award, receiving a medal, certificate, P8,000, and P3,000 worth of Lee Kum Kee products each.

The chefs were evaluated for the taste, texture, creativity, and presentation of their dishes, and for hygiene. Singaporean award-winning chef Aaron Tan Kean Loon and president of LTB Philippines Chefs Association James Antolin were among the judges who selected the winners.

According to Lee Kum Kee Philippines business manager Ryan Esguerra Cruz, the Philippine qualifiers will be working with the chefs in introducing new dishes using their products. — Michelle Anne P. Soliman

TransferWise links up with Philippine e-wallets

HONG KONG — Money transfer company TransferWise has begun processing international payments into Asian digital wallets in a move that its CEO says reflects their growing use as an alternative bank account.

E-wallets, which allow users to make cash transfers using their mobile phones, are widely used in many Asian markets.

TransferWise’s move in the Philippines and Indonesia is a shift in how the company does business in Asia, as in most other countries it provides cross-border payments only between bank accounts, Chief Executive Officer Kristo Käärmann said in an interview.

“It’s a recognition that maybe in the future we will view wallets the same as bank accounts,” he said.

The whole of Southeast Asia has more than 150 digital wallets fighting for market share and there are more in India, China and South Korea, where the industry is more mature and more consolidated.

International players are also looking to the region. WhatsApp is considering linking up with e-wallets in Indonesia to provide mobile payments, its second market for payments after India, Reuters has reported, citing sources.

“We chose to begin in the markets where the ratio of bank accounts to wallets is most significant, and started with the wallets that are most used,” said Käärmann.

He added that TransferWise, one of Europe’s best-funded financial technology firms, was considering expanding into other Asian markets including China and India.

TransferWise will initially allow payments to three e-wallets in Indonesia — GoPay, run by GoJek, the Indonesian ride hailer turned super app; OVO, backed by GoJek’s arch rival Singapore’s Grab; and DANA, backed by Ant Financial, an affiliate of Alibaba.

In the Philippines, TransferWise users can make payments to wallets run by GCash, which is also backed by Ant Financial, and PayMaya, which is backed by Tencent, and in Bangladesh to BKash, the country’s largest mobile financial services provider.

The six collectively have 150 million users, according to TransferWise.

In Indonesia, 66% of the population are unbanked, as are 65% in the Philippines.

“International remittance is one of the Philippines’ key economic contributors. We always welcome opportunities to collaborate with leading global companies to make that happen,” Paolo Azzola, managing director of PayMaya Philippines, told Reuters in an email.

The other five wallet providers did not respond to a request for comment.

Initially, TransferWise will process payments only into wallets using a third party intermediary, though it would like to allow international payments out of the wallets in the future, said Käärmann. — Reuters

FedEx says it is not relocating Asia Pacific hub to Clark

GLOBAL logistics giant FedEx Corp. on Wednesday denied reports it is moving its Asia Pacific hub to the Philippines from China.

“FedEx is not relocating and has no plans to relocate its Asia Pacific Hub,” the company said in a statement.

A news report quoting Philippine Ambassador to the US Jose Manuel G. Romualdez had indicated FedEx is returning its Asia-Pacific hub to the Philippines, saying it was “going to be operating a big hub in Clark.”

FedEx previously operated its Asia Pacific hub in Subic Bay in Zambales. However, the company transferred its operations to China where it opened its Asia Pacific hub in the international airport in Guangzhou in February 2009. FedEx decommissioned its facility in Subic in June 2009.

However, FedEx confirmed that it is planning to expand operations in Clark, Pampanga.

“Our planned operations in Clark will enable us to better serve our customers in the Philippines and are part of our ongoing expansion throughout the Asia Pacific region as our business continues to grow,” the company said.

“FedEx is committed to the Asia Pacific region, including our customers and employees in both China and the Philippines, and we continue to consider opportunities and make strategic investments to expand our service, enhance our network and provide greater global connectivity,” it added.

Finance Secretary Carlos G. Dominguez III mentioned in a public speech last month that FedEx had “signed a contract to locate in Clark.” — Arjay L. Balinbin

Google’s acquisition of Fitbit gets instant antitrust scrutiny

GOOGLE’S $2.1 billion acquisition of Fitbit Inc. means two of the largest technology companies now dominate the US market for fitness tracking devices and data, and the purchase is already coming under fire from US lawmakers.

Google and Fitbit expect the deal to face protracted regulatory review in light of the current political focus on competition and privacy issues in the tech industry, a person familiar with the transaction said.

And two of the company’s major critics in Congress urged regulators to conduct just such a thorough review.

“Why should Google be permitted to acquire even more companies while they’re under DOJ antitrust investigation?” Josh Hawley, a Republican US senator from Missouri, said on Twitter referring to the Justice Department. Representative David Cicilline, who heads the House antitrust investigation into the big tech companies, also criticized the deal.

“Google is signaling that it will continue to flex and expand its power in spite of this immense scrutiny,” said Cicilline, a Democrat from Rhode Island. “Google’s proposed acquisition of Fitbit would also give the company deep insights into Americans’ most sensitive information — such as their health and location data — threatening to further entrench its market power online.”

The acquisition is expected to close sometime in 2020, Fitbit said. Both companies have given themselves a year to gain antitrust clearances, although that can be extended through May 3, 2021 — and Google would owe Fitbit $250 million if the deal fails due to antitrust issues, according to Jennifer Rie, a senior litigation analyst at Bloomberg Intelligence.

That’s a broader time frame than other Google deals. Two acquisitions that were reviewed by regulators — the DoubleClick deal in 2007 and the ITA Software purchase in 2010 — took eight and nine months, respectively, to clear, according to Bloomberg Intelligence data.

In the current political climate, regulators will take a very close look, said Joel Mitnick, a partner in the antitrust division of Cadwalader, Wickersham & Taft LLP and a former Federal Trade Commission lawyer.

“Any proposed transaction is likely to get attention from the antitrust enforcement agencies with a high likelihood of a second request even though the proposed transactions may have no antitrust implications,” Mitnick said.

Still, Google and Fitbit are pressing ahead. Google has never built its own smartwatches and its software for other companies’ wearable devices isn’t very popular, a point the company will likely make to justify why the deal won’t harm competition.

Alphabet Inc.’s Google is a leader in digital data though, and Fitbit would give it a new stream of valuable health and activity data from Fitbit’s more than 28 million users. The purchase will mean Apple Inc. and Google control more than half of the global smartwatch market. Apple had 46% of this growing sector at the end of the second quarter, while Fitbit had 10%, according to research firm Strategy Analytics.

In the US, Apple and Google will be even more powerful because Fitbit has a larger share of the domestic market for smartwatches and fitness trackers. In the second quarter, Fitbit got almost six times more market share in North America than in the Asia Pacific region, according Strategy Analytics. And several other smartwatch makers use a Google operating system to run their devices, giving the internet giant an even bigger net to scoop up people’s digital health and fitness data.

“The merger arguably could reduce quality to consumers due to weakened data privacy protections,” Rie, the Bloomberg Intelligence analyst, wrote on Friday. “This is a developing theory of harm in M&A antitrust review and enforcers will likely assess the risk.”

Margrethe Vestager, the European Union’s antitrust chief, recently called for more rules to rein in how companies collect and use information. In August, she called tech giants “robot vacuum cleaners” sucking up valuable data in a way that can undermine competition. “Platforms like Google and Facebook, they collect data from consumers, not just the posts we like on Facebook or the searches we make on Google, but much more unexpected things,” she said.

The Fitbit deal is Google’s second major acquisition this year. It agreed to buy cloud services company Looker in June for $2.6 billion. The antitrust division of the Justice Department is seeking more information on the deal to determine whether the tie-up harms competition. Google argues the tie-up isn’t anti-competitive because Google is well behind Amazon.com Inc. and Microsoft Corp. in the cloud-computing market.

Doubling down on acquisitions while being investigated for anti-competitive practices will provoke a political backlash, said Matt Stoller, a fellow at the Open Markets Institute, which studies and recommends competition policies.

Google is putting regulators “in an impossible position,” he added. “They want it all and they don’t see any reason not to get it all.”

Rick Osterloh, senior vice president of devices and services at Google, said Fitbit health and wellness data will not be used for Google ads, and that the company will “never sell personal information to anyone.”

This isn’t the first time Google has promised to keep data from a purchased company separate from its own. The company made similar commitments when it bought advertising-technology company DoubleClick. Years later, the two companies’ databases were combined. When it bought smart thermostat maker Nest in 2014, Nest co-founder Matt Rogers said “Nest data will stay with Nest.” Less than a year later, that changed and Google connected some of its apps to Nest’s system. The blog post has been taken down and Rogers is no longer at Google.

That track record will raise skepticism among politicians and consumers, Stoller said.

Regulators could require Google to make a legal commitment not to use Fitbit data for advertisements or other purposes through a consent decree that could carry penalties if Google breaks it, Mitnick said.

“There’s lots of things that can be agreed to in a consent decree,” he said. “If Google wants the deal badly enough and can live with certain restrictions then that can happen.” — Bloomberg

Amway PHL enhances portfolio with XS energy drink

AMWAY PHILIPPINES recently shored up its roster of products with the launch of its first energy drink under its sports and nutrition brand, XS.

A zero-sugar energy drink, XS is touted to allow one to “experience more,” be it at work or at play.

XS is described by Amway officials as completing their portfolio in the Philippines as they continue to be collectively committed to helping people lead a healthier and active lifestyle. “XS actually completes our portfolio. And it serves to strengthen Amway’s positioning in the healthy and empower space,” said Leni Olmedo, Amway Philippines country manager, during XS’ launch party on Oct. 25 at The Island PH at Bonifacio Global City.

“With XS, Amway competes with and raises the bar on the staples found in every millennial’s bag,” she said, adding, “XS is relatable and aspirational, appealing to everyone from the most active high achievers to those who are taking the first steps on their own unique journeys,” she said.

XS was created in Laguna Beach in 2001. Each 250ml can of XS Energy Drink contains no sugar and just 10 calories per serving. It contains 50mg of caffeine, six B vitamins, L-Carnitine, L-Glutamine and Taurine.

The energy drink is exclusively sold through Amway Business Owners for P99 for one can, P594 for six cans, and P2,376 for a case (24 cans).

For now XS comes in two natural flavors — Cranberry Grape and Citrus — but Amway officials said they are set to introduce new flavors in the future. — Michael Angelo S. Murillo