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Nation at a Glance — (10/11/19)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Nation at a Glance — (10/11/19)

Ayala Land receives 5 citations at the Sustainable Business Awards Philippines

Ayala Land, Inc. (ALI) received a total of five awards at the Sustainable Business Awards Philippines (SBA Ph) 2019, a program that celebrates select companies for their outstanding performance in environmental and social sustainability. 

For their total commitment to sustainability, ALI was awarded Best Overall and Best Stakeholder Engagement and Materiality, which is awarded to companies that are able to build framework and policies for engaging with their stakeholders. The company was also given special recognition for Water Management, Strategy and Sustainability Management, and United Nations Sustainable Development Goals.

“We are truly grateful and honored to have been recognized for our efforts on sustainability through these awards. Sustainability has been a continuing journey for our organization and we continue to evolve our practices, to manage resources prudently, be mindful of our environmental footprint, and ensure our developments have a positive impact on society,” said ALI President and CEO Bernard Vincent Dy at the awards ceremony held in The Peninsula Hotel, Makati City.

Organized by Singapore-based Global Initiatives, the Sustainable Business Awards Philippines validates and recognizes companies which are leading the way in sustainable business and which have truly instilled sustainability into their long-term business strategy. The awards are also held annually in Singapore, Indonesia and Malaysia.

The awards are conducted in partnership with global consulting firm PricewaterhouseCoopers (PwC), and are reviewed and decided by a national advisory panel in each country. The advisory panels are made up of senior representatives from business, the academe, NGOs, regulatory agencies and media.

Ayala Land has been producing comprehensive sustainability reports for several years now, tracking Environmental, Social and Governance (ESG) metrics such as greenhouse gas (GHG) emissions throughout the various stages of the project development process, and benchmarking the company’s sustainability and ESG indicators with global standards. They have been embedding sustainability into their business by setting targets for carbon neutrality in the commercial businesses, and through the four focus areas, which are in line with the United Nations’ Sustainable Development Goals.

It has, moreover, embarked on a significant carbon emissions reduction program in all of its commercial properties, becoming the first Philippine company to target carbon neutrality by 2022.

ALI was once again the only Philippine company included in The Sustainability Yearbook 2019, the world’s most comprehensive publication on corporate sustainability. This is the third consecutive year that ALI has been named one of the most sustainable companies worldwide.

It also recently received the 3G Environmental Sustainability Award 2019 at the 4th Global Good Governance Awards presented by London-based Cambridge IFA, a leading international financial services think tank.

PEZA to cooperate on incentives draft

AFTER MONTHS of spirited opposition to a push by both the Executive and Congress to overhaul tax incentives for investors, arguing that this move risked pushing such businesses away, the Philippine Economic Zone Authority (PEZA) management on Wednesday agreed to help craft a new package after a meeting called by Trade and Industry Secretary Ramon M. Lopez, according to official statements.

“I called a special Board meeting of the Philippine Economic Zone Authority this morning to emphasize the importance of the tax and incentives reform that we are pushing for, which has the mandate from our President and was approved by the Cabinet,” Mr. Lopez, PEZA chairman, said in a press statement.

“We had to explain fully that there are ongoing refinements in certain provisions of the bill to address the serious concerns of the stakeholders, especially the existing PEZA locators, and a number of senators who are equally concerned on minimizing any possible repercussion on jobs if some firms leave the country.”

PEZA has warned that the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) — which will cut the corporate income tax rate gradually to 20% by 2029 from 30% currently, the highest in Southeast Asia, as well as make fiscal incentives more time-bound and tied to benefits to the overall economy — now making its way through the Senate could put jobs at risk (about 700,000 according to foreign chamber estimates) by pushing away those already operating here. The Finance department has questioned the basis of that estimate.

PEZA Director General Charito B. Plaza, vice-chairman of the Board and chief executive officer, had pushed for exemption of the agency’s locators from the overhauled tax incentives.

“To have a smoother transition, current discussions are on the number of years in the sunset provision for existing locators, as well as extra years of income tax holiday (ITH) and lower tax rates for new projects in strategic, high-technology industries with preference on locating in least developed areas,” Mr. Lopez said, adding that “[i]t was emphasized that the concerns of the stakeholders are being addressed.”

“With these adjustments, the PEZA Board together with its management, led by the Director General, has officially aligned its position to give strong support to the Corporate Income Tax and Incentives Rationalization Act and its parameters of having longer performance-based, time-bound, focused and transparent set of incentives,” he added.

“The PEZA DG will no longer ask for status quo or exemption from CITIRA.”

In a separate statement, also on Wednesday, Ms. Plaza said the PEZA management has “reached a reconciliation” with the Department of Trade and Industry “and both agreed to cooperate in fine-tuning CITIRA to consider concerns of PEZA and its industries”.

“PEZA is 100% supportive of the CITIRA bill’s objectives and goals and wants to contribute to its enhancement and final version to ensure that it will remove the fear of its existing locators that it’s not a major tax revamp, but an enhanced one and it will continuously attract more investors to the country…”

Perks now offered to economic zone locators consist of a four- to eight-year ITH; a special tax rate of five percent on gross income earned (GIE) after the ITH period expires; tax- and duty-free importation of capital equipment, spare parts and supplies; exemption from wharfage dues as well as export tax, duty, impost and fees; and eased restrictions on employment of foreign nationals.

PEZA said it is pushing for, among others, an increase in the GIE rate to seven percent in lieu of the higher CITIRA rate, a fixed 10- to 15-year transition period for locators on a per-project basis, continued tax- and duty-free importation of production-related materials and setting an investment threshold amount for big-ticket projects, among others.

“PEZA wants to end the agony of waiting and uncertainty caused by pending tax reform that has affected new investments and expansion projects of current PEZA-registered industries,” Ms. Plaza said in the statement.

Asked for comment on this development, Semiconductors and Electronics Industries of the Philippines, Inc. President Dan C. Lachica said that his group “supports the reduction of corporate income tax, but is very concerned about the inventive rationalization,” while American Chamber of Commerce of the Philippines, Inc. Senior Adviser John D. Forbes said: “We strongly welcome the statement of PEZA DG Plaza and look forward to the comments of DTI and DoF.”

“Investors are waiting and eager to get the CITIRA issue resolved in an investor-friendly way and get back to promoting inbound foreign investment to support higher economic growth and job creation.”

The impending overhaul of tax incentives has been blamed — together with trying global trade conditions in the face of an escalating Sino-US trade war — for lackluster foreign direct investment (FDI) inflows.

Latest available central bank data show actual FDI net inflows at $3.576 billion last semester, 38.8% less than the $5.842 billion in last year’s first half. FDI net inflows dipped 4.4% to $9.802 billion last year from a record-high $10.256 billion in 2017. The BSP had said it expects such inflows to hit $10.2 billion this year.

Separate Philippine Statistics Authority data — covering committed projects approved by investment promotion agencies — showed PEZA with the second-biggest amount at P23.485 billion last semester, accounting for 24.577% of the P95.56 billion total but 14.2% down from the year-ago P27.37 billion. Total FDI commitments, however, were more than double the P45.154 billion pledged in 2018’s first semester. — Jenina P. Ibañez

Manila Water flags rate impact of SC ruling

MANILA WATER Company, Inc. warned of an “exponential” water rate increase by as much as P26.70 per cubic meter (cu.m.) if the Supreme Court does not reverse its decision to fine the Ayala-led company for its supposed failure to comply with the Clean Water Act (CWA).

In a statement on Wednesday, the company said it had complied with its sewerage responsibilities under the law and should not be meted a penalty of as much as P921 million. It was among the entities that were fined by the court.

“If the concessionaires were to compress into five years as the SC ruling wants what was planned as a 40-year project, the hundreds of billions of pesos required would lead to an increase in the water bill of subscribers, leaving them less money for other necessities and triggering higher inflation,” it said.

Manila Water said aside from the 780% increase in water rates, Metro Manila should brace for a worse traffic if the decision issued in August is not reversed.

In its motion for reconsideration filed on Oct. 2, the water concessionaire said the decision to fine it for failing to complete its sewerage projects by 2009, or five years after CWA took effect, including the running daily fine of P322,102 until the sewerage projects are completed have no basis.

It said Section 8 of CWA simply required Metropolitan Waterworks and Sewerage System (MWSS), Manila Water and Maynilad Water Services, Inc. to interconnect the “existing” water lines of households, condominiums, subdivisions, among others, to the “available” sewer lines of the concessionaires.

Manila Water said that by 2009, it had interconnected 61,000 out of 63,000 subscribers to its sewer trunk.

“The rest could not be interconnected because the ‘available’ sewers would be compromised if overloaded. But since then, the company had installed additional sewers and spent billions of pesos more than it had collected for the purpose,” it said.

It said Section 8 did not envision the completion of the whole project, but only interconnection. It added that the law penalizes only the polluters or their positive acts of commission.

“An act of omission such as a failure to interconnect is not punishable,” it said.

“Worse traffic is also to be expected since hundreds of kilometers of roads, including EDSA, which are part of the Manila Water’s East Zone, would have to be dug up all at the same time,” it added. “The daily loss of P3.5 billion caused by existing traffic congestion could balloon significantly. — VVS

Austal, Cerberus line up bid for PHL shipyard

A CONSORTIUM of Australian shipbuilder Austal Ltd. and US private equity firm Cerberus Capital Management LP could make an offer in the coming weeks for Hanjin Heavy Industries & Construction Co.’s cash-strapped shipyard in the Philippines.

The companies, which have until Oct. 31 to submit a bid, are in exclusive talks with creditors and finishing up due diligence, court-appointed receiver Rosario S. Bernaldo said in a telephone interview on Tuesday. The shipyard in Zambales province to the northwest of Manila is the country’s largest, covering 300 hectares.

Eugene S. Acevedo, chief executive officer of Rizal Commercial Banking Corp., the Philippine lender with the biggest exposure to the shipyard, said he expects a bid to be made in the next two to three weeks. He declined to confirm what companies were involved.

“I’m reasonably optimistic that we will arrive at a transaction that will give every party what they need,” Mr. Acevedo said in an interview Tuesday.

Five Philippine banks, including three of the country’s largest, have a $412-million total exposure to Hanjin’s local unit.

A representative from Cerberus declined to comment, while another for Austal didn’t respond to calls.

A bid from a white knight would bolster the proposal of creditors to keep the shipyard open. It has pending contracts to build four more vessels, and its lenders believe it can secure two more orders a year to generate new business.

With or without a bid, Ms. Bernaldo said she would file a revised plan for court approval by the end of October so rehabilitation proceedings can be wrapped up by January, a year after the company filed for debt restructuring.

Hanjin Heavy Industries and Construction Co. of the Philippines has about $1.7 billion in liabilities and $2.3 billion in assets, according to Ms. Bernaldo’s original court report. The shipyard had a workforce of about 33,000 people at its peak, making it one of the country’s biggest employers. — Bloomberg

Making retail rural

The Entrepreneur Of The Year Philippines 2019 has concluded its search for the country’s most successful and inspiring entrepreneurs. Entrepreneur Of The Year Philippines is a program of the SGV Foundation, Inc. with the participation of co-presenters Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange. In the next few weeks, BusinessWorld will feature each of the finalists for the Entrepreneur Of The Year Philippines 2019.

Alexander Cruz
Chairman and CEO
XRC Mall Developer Inc.

AS A CHILD, Alexander Cruz had to sell salt and fruits in a public market to fund his schooling.

Today, the chairman and chief executive officer (CEO) of XRC Mall Developer Inc. has built 28 community malls and five public markets with the goal of bringing growth to the countryside.

At the age of 12, Mr. Cruz started working to support himself, pushing carts of shoes from one department to another in a Caloocan shoe store. He wanted to study further so he worked out a deal with a relative to work for food and lodging near his high school.

Knowing that college would be a different challenge, Mr. Cruz was fortunate enough to be awarded a full Meralco Foundation, Inc. scholarship. He completed his Bachelor’s degree and started working for a construction company.

Then misfortune struck. In his third month on the job, he slipped on a walkway and fell into 2 feet of molten metal. Despite excruciating pain, he was able to pull himself out. He spent a year in the hospital recuperating before eventually returning to work.

Despite having a steady job, Mr. Cruz felt challenged to increase his income. His father-in-law suggested microfinancing and gave Mr. Cruz P50,000 as starting capital. This idea sparked Mr. Cruz’ business acumen and he began offering microfinancing services at the local wet market after office hours.

Seeing better profit potential in microfinancing, Mr. Cruz decided to focus on his business.

Coincidentally, the construction company decided to downsize at the time and he opted for voluntary retrenchment. Utilizing his retrenchment package, he was able to further grow his microfinancing business until he was able to buy his first commercial building and a home.

In time, Mr. Cruz noted that more people started entering microfinancing. This prompted him and his wife to upgrade to the pawnshop and money exchange business. Mr. Cruz was able to build his clientele, leading to a dramatic growth to 43 branches in 10 years. He eventually sold the business, however, after robberies resulted in the deaths of a family member and an employee.

With the proceeds from selling his pawnshop business, he was able to build his first XRC community mall in Angono, Rizal in 2002, in front of a public market. His first anchor tenant was a well-known department store. Mr. Cruz relates that, back then, he was not keen on bank financing and preferred to grow organically. His second XRC mall in Morong, Rizal, was funded internally. It was only after his fifth mall that Mr. Cruz started to look into bank financing, using the assignment of receivables from his commercial leasing revenues as collateral.

He also ventured into other developments. He recalls when his wife jokingly asked him to give her a hotel as a gift, which led Mr. Cruz to building their first hotel in Puerto Galera. This was followed by five other hotels in various locations such as Iligan and Batangas.

One of Mr. Cruz’s strategies to ensure the success of his mall is to plan out his tenant base to create a full ecosystem that supports the businesses. For example, he put up malls next to his hotels to guarantee good foot traffic and a captured market for his tenants. He also offered spaces to call centers since their employees are potential mall patrons.

Mr. Cruz also prefers to lease land for around 30 years so that he can use his funds for construction of the mall rather than purchase of the land. He claims that by doing so, he is able to gain his return on investment in just four to five years.

Yet, Mr. Cruz never forgot his roots and started focusing his time and experience in transforming the concept of public wet markets around the country. Remembering how he had to use disgusting public toilets as a child, Mr. Cruz ensures that all the public markets he constructs contain clean facilities. He invests in premium toilets, generators, fire detectors and CCTV systems for the safety and convenience of both tenants and customers. He also established a security agency to help guard his projects.

He constantly takes the initiative as a first mover, using a combination of his experience, instinct and data to analyze if a location holds any potential for a mall. He firmly believes in developing the untapped potential of the countryside through his commercial spaces, ensuring quality facilities, new commercial opportunities and increased employment by bringing in business process outsourcing businesses and tenants that also operate in metropolitan areas. He claims XRC Malls fills the niche between larger mall developers and public markets.

In developing malls in rural areas, he hopes to help decongest areas like Metro Manila by directly bringing the mall experience and employment opportunities to those in the provinces.

He explains that true success for him is being able to uplift the lives of those in the countryside.

Growing up while working in public markets, Mr. Cruz considers his biggest strength to be his ability to relate with those living on the peripheries of society. He anchors his leadership on good intentions, fairness and compassion tempered with practicality. He relates how he would be more lenient with first-time tenants who were just starting out, although he also says he does his due diligence to ensure his goodwill is not abused.

His heart for the community shows best through XRC’s corporate social responsibility services, held through the Xander Youth Foundation. Named after their late son, the foundation offers pre-school education and meals for free.

In addition, Mr. Cruz shares his dream to help create meaningful and gainful employment for people in the countryside. He sympathizes with people from rural areas who are forced to leave their families to find employment in Manila or overseas.

He hopes that by developing more retail spaces in rural areas, he can help encourage other business owners to create jobs and help Filipino families in the countryside stay together.

The official airline of the Entrepreneur of the Year Philippines 2019 is Philippine Airlines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. Banquet sponsors are Global Ferronickel Holdings, Inc., Jollibee, Udenna Corp. and Uratex.

The winners of the Entrepreneur Of The Year Philippines 2019 will be announced on Oct. 15 in an awards banquet at the Makati Shangri-La Hotel. The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2020 in Monte Carlo, Monaco in June 2020.

The Entrepreneur Of The Year program is produced globally by Ernst & Young.

SSI adds Crystal Jade to portfolio

SSI GROUP, Inc. is bringing back Singapore restaurant chain Crystal Jade to the Philippines next year, as the upscale retailer continues to expand its food and beverage portfolio.

In a statement issued Wednesday, the Tantoco-led firm said it has entered into a territory agreement with Crystal Jade Management PTE Ltd that would allow it to own and operate Crystal Jade restaurants in the country. This includes international brands Crystal Jade Golden Palace, Crystal Jade Hong Kong Kitchen, Crystal Jade La Mian Xiao Long Bao, and Crystal Jade GO.

SSI will initially open Crystal Jade Hong Kitchen in Central Square, Bonifacio Global City in Taguig by the first quarter of 2020. The menu will feature the brand’s signature dim sum, congee, roasted delicacies, and sizzling wok specialties.

“The opening of Crystal Jade in the Philippines is aligned with our desire to provide consumers with complete lifestyle offerings through global partnerships that cater to the eclectic and sophisticated taste of the Filipino consumer,” SSI President Anthony T. Huang said in a statement.

Established in Singapore in 1991, the Crystal Jade group now has more than 100 locations in 30 cities across the Asia Pacific region. It was recognized as a Michelin one star brand in Singapore from 2016 to 2018, while also receiving several Michelin Bib Gourmand commendation awards for outlets in Shanghai and Hong Kong.

Crystal Jade Culinary Concepts Holdings Chief Executive Officer Douglas DeBoer called the partnership with SSI “another proud moment” for the company.

“Crystal Jade is dedicated to bringing authentic, quality Chinese cuisine to contemporary audiences around the world and we look forward to delighting consumers across the Philippines very soon,” SSI quoted Mr. DeBoer as saying in a statement.

Crystal Jade previously had two restaurants in the country, namely Crystal Jade Shanghai Delight located at VMall in Greenhills and Crystal Jade Dining IN in BGC. Both are now closed.

The partnership with Crystal Jade comes after SSI opened the first Philippine store of New York-based burger chain Shake Shack last May. SSI’s unit Specialty Food Retailers, Inc. has the exclusive franchise for Shake Shack in the country.

Mr. Huang then said they would like to expand their food segment, which currently accounts for only 2.5% of the total business. SSI also operates the Salad Stop chain in the country.

SSI had a total of 593 stores by end-June, covering a floor area of about 116,345 square meters. The company has 91 brands under its portfolio, including Hermes, Gucci, Salvatore Ferragamo, Zara, and Tiffany & Co., among others.

The company’s net income grew 22% to P346 million for the first half of 2019, after net sales rose 6.3% to P9.85 billion.

Shares in SSI jumped 2.48% or six centavos to close at P2.48 each at the stock exchange on Wednesday. — Arra B. Francia

TDF yields down on hints of fresh RRR cut

YIELDS ON term deposits continued to decline on Wednesday on the back of slower inflation and chances of another cut in banks’ reserve requirement ratios (RRR).

The Bangko Sentral ng Pilipinas (BSP) received bids totalling P114.777 billion for its term deposit facility (TDF) yesterday, well above the P80 billion on offer.

Wednesday’s total tenders also surpassed the P92.148 billion the BSP received last week for a P70-billion offering.

Bids for the seven-day papers totalled P38.63 billion, higher than the P30 billion on offer and also more than last week’s P34.272 billion.

Lenders asked for yields ranging from 4.125% to 4.3% for this tenor, falling from last week’s 4.175-4.4% margin, resulting in an average rate of 4.2348%, 1.53 basis points (bp) lower than last week’s 4.2501%.

Meanwhile, the two-week deposits were met with bids amounting to P43.38 billion, more than enough to fill the P30 billion the BSP placed on the auction block. This is also bigger than the P30.834 billion in bids seen last week for the central bank’s P20-billion offering.

Banks sought returns between 4.15% and 4.3%, narrower than the previous week’s 4.125-4.3499% range. This caused the average rate for the 14-day term to slip to 4.2485%, down 0.62 bp from last week’s 4.2547%.

On the other hand, the 28-day term deposits attracted tenders worth P32.767 billion against the P20 billion on offer, rising from last week’s P27.042-billion tenders.

Accepted yields were within 4.18-4.3%, narrowing from the previous auction’s 4.1-4.4% margin. This brought the one-month paper’s average rate to 4.2754%, down 2.85 bps from last week’s 4.3039%.

The TDF is the central bank’s primary tool to shore up excess liquidity in the financial system and to better guide market interest rates.

The central bank’s policy-setting Monetary Board cut benchmark interest rates by another 25 bps at its meeting on Sept. 26, bringing the rates for overnight reverse repurchase, overnight deposit and lending to four percent, 3.5% and 4.5%, respectively, amid easing inflation.

“Term deposit facility yields fell across the board following the release of weaker-than-expected Philippine inflation report last week,” a trader said in an email.

“BSP TDF auction yields mostly eased slightly…after BSP Governor [Benjamin E.] Diokno signalled possible cut in banks’ reserve requirement ratio (RRR) for the rest of 2019 if inflation continues to ease,” Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said in an email.

Mr. Ricafort added that the stronger peso and lower oil prices also contributed to the decline in TDF yields.

Headline inflation clocked in at 0.9% in September, further easing from the 1.7% logged in August, according to data from the Philippine Statistics Authority.

The central bank announced last month that it will reduce lenders’ RRR by another 100 bps effective November to bring the reserve requirement of universal and commercial banks to 15% from 16%. The reserve ratios of thrift banks will also be cut to five percent from the current six percent, and to three percent from four percent for rural and cooperative banks.

Mr. Diokno said on Tuesday that the central bank remains open to another round of RRR cuts within the year, but noted this will be data-dependent. Meanwhile, the BSP is done cutting benchmark rates for now, he said. — Luz Wendy T. Noble

Realme launches first quad-camera phones

REALME PHILIPPINES has launched two quad-camera smartphones, targeting to provide a “premium mobile experience” at prices well below those of other brands’ flagship phones.

The company last week launched the Realme 5 and Realme 5 Pro, which both feature four rear cameras and priced below P15,000.

“Designed to deliver premium mobile experience, these phones are equipped with exceptional smartphone essentials such as strong system performance, superior camera capabilities and long battery life set to disrupt their respective segments,” Realme said in a statement.

“We at realme Philippines are thrilled to revolutionize the smartphone experience of the Filipinos by leading the leap to attainable quad camera technology, which marks realme’s new era of smartphone imaging technology. By bringing the realme 5 Pro and realme 5 to the Philippine market, we put an end to the notion that only flagship phones can have premium features,” Realme Philippines Marketing Director Austine Huang was quoted as saying.

REALME 5 PRO
The Realme 5 Pro features a Qualcomm Snapdragon 712 AIE processor and a Qualcomm Adreno 616 GPU. It has a 6.3-inch screen with a dewdrop design for a wider and clearer display.

The phone’s four rear cameras consist of an 8-megapixel (MP) 119-degree ultra-wide-angle lens, a 2MP portrait lens, a 2MP ultra-macro lens and a 48MP Sony IMX586 main camera.

“The IMX586, which underwent stringent research and tests by users and industry experts, features sensor optimization to deliver higher-quality images,” Realme said.

The realme 5 Pro also has a 16MP front camera with f2.0 aperture and Sony IMX471 image sensor.

The phone’s camera likewise has the Nightscape and Chroma Boost modes. It also supports slow-motion video recording in 960fps and 720p.

The Realme 5 Pro is equipped with a 4035mAh battery, and its AI Freezer function can predict the user’s app usage and freeze unused apps accordingly to save power.

The phone has two variants: 4GB RAM with 128GB internal storage and 8GB RAM with 128GB storage. It is available in crystal green and sparkling blue colors.

The Realme 5 Pro 4GB+128GB is priced at P11,990, while the 8GB model is sold for P13,990.

REALME 5
Meanwhile, the Realme 5 runs on a Snapdragon 665 processor and third-generation Qualcomm AI Engine, as well as an Adreno 610 GPU.

The phone features a 6.5-inch mini-drop full-screen display and an AI rear quad-camera setup: a 12MP primary camera, an 8MP 119-degree ultra-wide-angle lens, a 2MP ultra-macro lens, and a 2MP portrait lens.

Its 13MP AI front camera has the selfie beauty function. It adds AI beauty algorithms to accurately recognize photographed subjects using a total of 296 feature recognition points, providing eight million beauty effects.

The smartphone also has the Nightscape and Chroma Boost modes and can record slow-motion videos in 240fps and 720p. It has a 5000mAh battery.

The Realme 5 comes in three variants — 3GB RAM with 32GB storage (P6,990), 4GB RAM+64GB (P7,990) and 6GB RAM+128GB (P9,900) — and has two colors, namely crystal blue and crystal purple.

Maynilad allots P53B for new sewer lines

MAYNILAD Water Services, Inc. has allocated more than P53.4 billion to install new sewer lines spanning up to 425 kilometers starting next year until the end of its concession in 2037 to ensure the provision of sewerage services for its customers in the west zone.

“Sewer pipes have to be laid at a lower depth compared to water pipes — some as deep as fourteen meters below ground level — so wastewater projects take a longer time to complete,” said Randolph T. Estrellado, Maynilad chief operating officer, in a statement on Wednesday.

He warned that the installation of the sewer network may cause some inconvenience to motorists.

“To minimize traffic congestion in our project sites, we will use trenchless technology where feasible, although said technology will significantly increase the cost to install the sewer network,” he said.

Maynilad said the new sewer lines, to be laid in various portions of the west concession from Caloocan to Cavite over the next 18 years, will enable the company to catch wastewater generated by its over 9.6 million customers, and convey it to sewage treatment plants.

It said about 20% of Maynilad’s water-served population are currently connected to the sewer network. The share came from only 6% before the privatization of MWSS operations in 1997, Maynilad said, adding that those that are unconnected are provided septic tank cleaning services by Maynilad.

Maynilad said it is now laying sewer lines in Valenzuela, Cavite City, Las Piñas, and in barangays Cupang and Tunasan in Muntinlupa. It recently completed sewerage projects such as the those in Pasay and Parañaque.

The company said under its approved business plan, it still has to spend almost P200 billion for wastewater projects from 2019 until the end of the concession period in 2037.

“With the invaluable assistance of local government units and the relevant government agencies, we can facilitate completion of our sewerage projects despite the difficulties posed by right-of-way conflicts and lack of land for treatment facilities. Only by working together can we truly realize the goal of rehabilitating the Manila Bay,” said Ramoncito S. Fernandez, Maynilad president and chief executive officer.

The west zone concessionaire operates and maintains 588 kilometers of sewer lines and 22 wastewater facilities that have a combined treatment capacity of about 664,000 cubic meters per day.

Maynilad’s statement on its capital outlay to install new sewer lines comes after it filed a motion for consideration on the Supreme Court decision to impose a P921 million fine on the company for failing to connect all existing sewage lines to the available sewerage system within five years from the effectivity of the Clean Water Act, or from May 6, 2004.

Metro Pacific Investments Corp. (MPIC) has a 52.8% stake in Maynilad. MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. — Victor V. Saulon

US growth sustainable: Powell

DENVER — Federal Reserve chairman Jerome Powell on Tuesday flagged openness to further rate cuts to fend off global economic risks, repeating that the central bank will act “as appropriate” amid an economy that he said is likely to continue to expand.

“This feels very sustainable,” Powell said in Denver at the annual meeting of the National Association of Business Economics.

“Clearly things are slowing a bit,” he said, noting that it’s normal for long expansions to have such periods. Twice in the 1990s, he said, the economy similarly downshifted, only to gain steam once the Fed cut interest rates a few times.

The Fed two interest rates this year, in July and September, were made in that spirit and have helped maintain a “favorable” outlook for jobs and inflation, Powell said. The US economy “may just be gathering itself — there’s no reason why the expansion can’t continue,” he added.

Powell noted recent data revisions showed less job growth in the year to March than previously estimated, turning a “booming” market into one of moderate growth.

Other recent economic data, including a possible contraction in manufacturing, add to the sense of reduced momentum.

“It seems that Powell is trying to, in a soft way, demonstrate to the market that the Fed continues to be aware of the downside risks and is actively willing to support the economic expansion as needed,” said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.

NOT QUANTITATIVE EASING
Powell also used his speech to let markets know the central bank would soon begin allowing its balance sheet to expand to ensure smoother functioning of US short-term funding markets.

Recent spikes had raised concern that banks had an inadequate supply of reserves to manage occasional periods of high demand, and Powell’s remarks on Tuesday suggested the central bank was coming around to that view and would start buying Treasury bills to replenish reserves.

This move, he emphasized several times, would be technical, had no bearing on monetary policy and “in no sense” was the same as the bond-buying the Fed conducted in the aftermath of the financial crisis to ease monetary policy.

US Treasury prices rose after Powell’s comments on the balance sheet, while stocks pared losses.

READY FOR ANOTHER CUT?
At separate events elsewhere, two other US central bankers signaled their support for more policy easing.

“I wouldn’t mind another cut. I could see it either way,” Chicago Fed President Charles Evans told the Rotary Club in Chicago.

“It would help for a little more insurance. Is it necessary and essential? I’m not sure. But I’m certainly open minded to those arguments,” said Evans, who supported both Fed rate cuts this year to help the Fed faster achieve its 2% inflation goal.

In St. Cloud, Minnesota, Minneapolis Fed President Neel Kashkari said he was “generally in favor” of lower interest rates, but, “I don’t know how much lower they should go.”

One issue, he said, is how difficult it is to estimate the effect of trade wars on economic growth. “It’s almost, your guess is as good as mine,” he said.

The Fed’s September rate cut, to a target range of 1.75% to 2.00%, drew three dissents out of 10 votes, two from policy makers who believed the Fed should not ease policy at all, and one from St. Louis Fed President James Bullard who wanted a bigger, half-point interest-rate cut.

Among the seven nonvoting policy makers, at least a couple also disagreed with the move, including Kashkari who had sided with Bullard.

Traders of short-term interest-rate futures are currently pricing in more than an 80% chance of a third interest rate cut this year when the Fed next meets, Oct. 29-30. Traders see a 40% chance of a fourth rate cut in December.

“We will be data dependent, assessing the outlook and risks to the outlook on a meeting-by-meeting basis, Powell said, repeating that as global risks evolve the Fed would move “as appropriate” to keep the decade-old expansion under way.

“Looking ahead, policy is not on a preset course,” he said.

Much of Powell’s speech centered on how a “data dependent” Fed sometimes struggled to be sure it has statistics that accurately inform it about the state of the economy.

Mismeasurement of productivity may have actually understated growth in gross domestic product in recent years, Powell said. More significantly, the revisions to the employment data showed the economy added fewer jobs than previously estimated — a fact that could bolster arguments made by some Fed officials that there is ample “slack” left in the economy and thus room for lower rates.

The use of “big data” may help produce more accurate real-time employment measures in the future, Powell said. But in the meantime the revisions meant that “where we had seen a booming job market, we now see more-moderate growth.” — Reuters

20 years of making wine meant for Filipino tastes

PHILIPPINE wine company Novellino celebrated its 20th anniversary earlier this week, marking its hold on the growing wine industry of the country.

Glasses of Novellino were passed around at an event on Tuesday in Manila House in BGC. The wines, with a price range of P200 to P400 a bottle, are made in a plant in Laguna (the only thing imported about Novellino is the grape juice from which it is made).

It’s easy to look down on the wine because of its price range — but then again, the process to make the wine sweeter (the sweetness giving it the mass appeal that has allowed it to stay for 20 years) is more sophisticated than traditional winemaking. It has to do with going against nature and arresting the fermentation process, allowing for only some of the yeasts to convert the sugar into alcohol, according to a presentation during the event by Christopher Quimbo, one of the heirs to the Novellino fortune established by his father, Vicente, and current President and General Manager.

In 2015, Christopher Quimbo was awarded the ASEAN Young Entrepreneur of the Year Philippines and the 2015 ASEAN SME Excellence Award for Innovation, on behalf of Novellino’s parent company, Bel Mondo Italia Corp.

Novellino products are also sold in Vietnam, the UAE (some of them as non-alcoholic beverages in the predominantly Muslim country), and even in one of the wine capitals of the world, California. This year, they’re launching Novellino Wines on Tap (essentially a keg).

While Novellino was founded in 1999, one of its biggest coups was in 2011 with the opening of its facility in Laguna, where all the wine action is made. Asked why it was so important to make all the wines here (as opposed to the arguably easier process of just having finished wine repackaged), Mr. Quimbo said, “We can control the factors that allow us to have full control of making a product that is delicious to the Filipino public.”

A lot of the wine industry has to do with age — not only in fermenting the juice that makes the wine, but also the process by which a company plants its roots. “We’re a young player. We’re a small company in the grand scheme of things. Wine is a small category compared to beer, compared to spirits. But it’s the fastest-growing. We are going up against the Goliaths in the world,” Mr. Quimbo admits.

“Filipinos deserve a wine that’s made for them.” — Joseph L. Garcia

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