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The Latest Trends Influencing Philippine Office Space Changes

Over the last decade, the only constant in the workspace sector has been change. In the Philippines and across the world, the way we work is revolutionizing everything about the way we do business — down to our workspaces. Static, expensive, conventional workspaces with out-of-date facilities are not going to cut it for today’s workers. The expectation is to work in offices as inspired as the ideas generated by the people within.

It’s easy to see how a captivating, well-conceived interior can inspire creative thinking and productivity. Elements as simple as plants can not only improve productivity, but one of many studies have shown that they can also improve perceptions of air quality, workplace satisfaction, and cognitive function. The addition of the latest business technology will also help employees be more productive and keep information secure.

Beyond productivity, coworking spaces offer employers savings on lease costs and the power to decide how much space they lease, and for how long — options not previously available through traditional property rental agreements. Eco-conscious companies can also reduce their negative impact on the environment, while also helping to improve work-life balance, by reducing commute times with coworking spaces. Employers also have the opportunity to attract talents and adapt to the changing market, something that is invaluable to companies looking to expand their footprint. Given the median age of the workforce is 23 years old, according to National Statistical Coordination Board (NSCB) data, companies need coworking spaces to attract a younger talent pool.

As millennials take up a greater portion of the workforce, their needs and motivations are reshaping how workplaces are structured. In an annual global survey of business professionals conducted by IWG plc, the holding group for Spaces, 82 percent of Filipino respondents considered flexible working to be the new normal and 54 percent reported working outside their company’s main locations half the week or more. These responses exceeded global averages providing clear evidence of the changes underway in the country. A promising development of the nation’s start-up ecosystem is also a key contributor to the growing popularity of coworking spaces.

The government has taken notice of this growing trend, passing a bill in May 2019 to amend the Labor Code to allow flexible working arrangements. As a result, employers in the Philippines, and across the region, are seriously considering the potential business and workplace culture benefits of offering these types of arrangements. When metropolitan areas are overflowing with start-up talent, an ambitious freelance workforce and an endless stream of commuter traffic, like we have seen here, the conditions are ripe for a boom in flexible working. Coworking Resources estimates that memberships with flexible workspace providers in the Asia-Pacific region are growing at an average of 40 percent — outpacing the global average.

This is why Spaces’ cutting-edge, vibrant office spaces are making their mark on major Asian cities. Our World Plaza facility in Manila was recently awarded the 2019 PropertyGuru Philippine Property Award for the “Best Co-Working Space” in the country for its signature Scandinavian-inspired design. These dynamic workspaces attract a like-minded community of professionals who are open-minded and share an entrepreneurial spirit. Workspaces, like the World Plaza facility, facilitate socializing with design features meant to foster new connections and encourage new ways of working and interacting with other businesses. These stylish business clubs truly involve people in the buzz and energy of Spaces, and make them feel at home with hospitality services that include a café with freshly-baked pastries and expert baristas.

Our team makes members feel right at home, not just by helping professionals make new connections, but also by paying attention to the details so that they can focus on growing their businesses. In addition to providing fresh, healthy meals, Spaces also takes care of IT, postal and printing services, dry-cleaning, and even provides a Spaces bike members can take out for a ride. Spaces locations also host a full program of professional events, such as meet-ups and networking and learning sessions organized by local groups including Connected Women, FLAIR Image Consultancy and Young Professionals Committee of the European Chamber of Commerce of the Philippines (ECCP).

These elements are all part of the free-spirited, energetic environment Spaces cultivates to serve a like-minded community of future business leaders. Regardless of the business needs, our high-quality workspaces can be configured to meet them in an inviting, inspirational atmosphere, and there is definitely something to be said about working somewhere that could be on the cover of a magazine.

As the Filipino business community adapts to the rapid changes in how and where people work, Spaces can help to cultivate the growth of the local start-up community and allow employers to offer flexible workspace options to attract the best of today’s talent. The trends influencing office changes in the Philippines will only continue its push forward and Spaces is at the forefront of bringing people and ideas together so they can be on the lookout for new opportunities to thrive.

For more information, contact +632 669 2700 or visit https://www.spacesworks.com/.

SteelAsia chairman is Entrepreneur of the Year Philippines

BENJAMIN O. YAO, chairman and chief executive officer (CEO) of SteelAsia Manufacturing Corp. (SteelAsia), the Philippines’ flagship steel firm, was named the Entrepreneur Of The Year Philippines 2019 in an awards banquet held last night at the Makati Shangri-La hotel.

Mr. Yao will represent the country in the prestigious World Entrepreneur Of The Year awards in Monte Carlo, Monaco in June 2020.

Mr. Yao was recognized for championing the steel industry in the Philippines. Mr. Yao’s inspiration, leadership and focus on transformation and disruption have made SteelAsia the Philippines’ flagship steel firm and among the largest rebar manufacturers in Asia. With presence across the archipelago, its annual production reaches over 2 million metric tons, serving over 2,000 customers, including the country’s biggest property developers.

Mr. Yao also received the Master Entrepreneur award for applying sound management practices in critical areas of the company including finance, business development, marketing, human resources and sales.

As part of Mr. Yao’s aim to elevate the Philippine steel industry and reduce dependence on imports, SteelAsia has established state-of-the-art facilities to manufacture H beams, sheet piles and other steel products that were previously all imported. He is also working on a new joint venture to bring in the first blast furnace to the Philippines.

Other award categories were Woman Entrepreneur, Emerging Master Entrepreneur and Small Business Entrepreneur.

Esther Wileen S. Go, president and CEO of MediLink Network, Inc., received the Woman Entrepreneur award for leveraging on her love for technology and her experience in healthcare operations when she took over her father’s small technology company which provided automated health coverage eligibility verification services. Through a series of strategic innovations, she transformed MediLink into an industry-leading, award-winning healthtech provider that also offers data mining and machine learning solutions.

Jose P. Magsaysay, Jr., chairman Emeritus of Cinco Corp., received the Emerging Master Entrepreneur award. Mr. Magsaysay started Potato Corner with his partners in 1992 to make money on the side. By experimenting with a franchising business model and making business owning accessible, the company’s network has grown to over 1,000 kiosks, including 200 outlets in 11 countries. Today, it is diversifying its brand line-up by launching food items that cater to various markets.

Rolandrei Viktor E. Varona, founder of Zark’s Food Ventures Corp., was named the Small Business Entrepreneur. His determination to have his own restaurant and capture the young market with savory burgers inspired him to establish Zark’s Burgers in 2009. Zark’s Burgers became the standard for affordable quality burgers and a go-to restaurant for Filipino youth. In just 10 years, Zark’s Burgers has grown from a humble 16-seater outfit to a franchise powerhouse boasting 60 branches nationwide.

The recipients of the category awards were chosen from among 15 finalists representing enterprises from diverse industries from various regions in the country.

The other finalists were: Alexander M. Cruz (XRC Mall Developer, Inc.), Beverly M. Dayanan (Contempo Property Holdings, Inc.), Miguel C. Garcia (DTSI Group, Inc.), Alvin S. Hing and Paul T. Holaysan (Excelsior Farms, Inc.), Henry Lim Bon Liong (SL Agritech Corp.), Olivia Limpe-Aw (Destileria Limtuaco & Co., Inc.), Sindulfo L. Sumagang (Oneworld Alliance Logistics Corp.), Regan C. Sy (Regan Industrial Sales, Inc.), Necisto U. Sytengco (SBS Philippines Corp.) and Aivee A. Teo (The A — Institute).

SGV Chairman and Managing Partner and SGV Foundation Chairman J. Carlitos “Itos” G. Cruz emphasized the importance of disruption and transformation, saying that, “Today’s age of transformation has given entrepreneurs vast opportunities for growth; but at the same time, it exposes businesses to various risks and uncertainties. To help us navigate through this era of disruption, we need visionaries who can leverage on new digital platforms and provide people with a clear purpose.”

All nominees went through a strict financial data ranking system used by all Entrepreneur Of The Year participating countries.

The finalists were evaluated further by an independent panel of judges composed of distinguished business personalities. The panel was co-chaired by Antonette C. Tionko, Undersecretary of Revenue Operations Group and the Corporate Affairs Group of the Department of Finance; and Ambassador Jesus P. Tambunting, OBE, chairman of Capital Shares Investment Corp. and 2009 Entrepreneur Of The Year Philippines. The other panel members were Ramon S. Monzon, president and CEO of The Philippine Stock Exchange, Inc.; Rizalina G. Mantaring, president of the Management Association of the Philippines; Reynaldo D. Laguda, executive director of Philippine Business for Social Progress; and Natividad Y. Cheng, chairperson and CEO of Multiflex RNC Philippines, Inc. (URATEX) and 2017 Entrepreneur Of The Year Philippines.

The Entrepreneur Of The Year was founded in the United States by professional services firm EY in 1986 to recognize the achievements of the most successful and innovative entrepreneurs worldwide. In 2001, EY expanded the program and launched the World Entrepreneur Of The Year awards.

In the Philippines, the SGV Foundation, Inc. established the Entrepreneur Of The Year program, in 2003.

Jollibee Foods Corp. Chairman and CEO Tony Tan Caktiong, the first ever Entrepreneur Of The Year Philippines, went on to win as World Entrepreneur Of The Year 2004 in Monte Carlo, Monaco.

Socorro Cancio-Ramos, founder of National Book Store, was named Entrepreneur Of The Year Philippines the year after and, followed by Lance Y. Gokongwei, President and CEO of Cebu Air, Inc.; Senen Bacani, chairman and president of La Frutera, Inc.; Wilfred Steven Uytengsu, Jr., president and CEO of Alaska Milk Corp.; Jesus Tambunting, then former chairman and President of Planters Development Bank; Tennyson Chen, president of Bounty Fresh Foods, Inc.; Erramon I. Aboitiz, president and CEO of AboitizPower Corp.; Jaime I. Ayala, founder and CEO, Hybrid Social Solutions, Inc.; Ben Chan, chairman of the Board of Suyen Corp.; Nico Jose S. Nolledo, chairman and CEO of Xurpas, Inc.; and Natividad Cheng, chairperson and CEO of Multiflex RNC Philippines, Inc.

Supporting the program as co-presenters are the Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange. Official airline is Philippine Airlines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. Banquet Sponsors include Global Ferronickel Holdings, Inc.; International Container Terminal Services, Inc.; Jollibee Foods Corp.; Manny O Wines; Multiflex RNC Philippines, Inc.; Robert Blancaflor Group, Inc.; Udenna Corp.; Universal Harvester, Inc.; and Vista Land & Lifescapes, Inc.

Remittance data bare Q3 spending lift

By Luz Wendy T. Noble

MONEY SENT HOME by overseas Filipino workers (OFW) grew for the second straight month in August — by a slower pace than in July, although it was still a turnaround from the year-ago slump — according to data the Bangko Sentral ng Pilipinas (BSP) released on Tuesday.

Economists said July’s and August’s increases bode well for household spending, which fuels about 70% of gross domestic product (GDP). The Philippine Statistics Authority will report third-quarter GDP data on Nov. 7.

OFW cash remittances grew 4.6% to $2.589 billion in August from $2.476 billion a year ago, and by 0.31% from July’s $2.581 billion, central bank data showed.

August’s increment was smaller than July’s 7.5% but was still a turnaround from the 0.9% reduction recorded in August last year.

Personal remittances, which include inflows in kind, rose 4.2% year-on-year to $2.875 billion in August, also slower than July’s 7.2% but still turning around from the 1.4% contraction recorded a year ago.

Sought for comment, UnionBank of the Philippines Inc. Chief Economist Ruben Carlo O. Asuncion noted that “July remittances were equally robust as the August print and September may also be positive.”

“Thus, three months of robust remittances growth will consequently bode well for domestic demand and consumption,” he said in an e-mail.

For Security Bank Corp. Chief Economist Robert Dan J. Roces, however, household consumption alone will be “hard-pressed” to drive overall economic growth amid “slowing capital formation and government spending.”

“Nonetheless, we see a sustained uptick in the coming months as the holiday season approaches and, thus, we maintain our full-year cash remittance forecast at $29.5 billion” compared to 2018’s $28.943-billion cash inflows.

The country’s GDP growth clocked in at dismal 5.5% in the second quarter against the government’s 6-7% target for full-year 2019, due largely to late enactment of the P3.662-trillion national budget that left new projects unfunded.

On a year-to-date basis, cash remittances rose by 3.9% to P19.908 billion as of August from P19.057 billion in last year’s comparative eight months, while personal remittances increased by 3.6% to P21.995 billion from P21.223 billion.

The same comparative eight months saw cash remittances from land-based and sea-based workers rising by 2.8% and 8.2% to $15.5 billion and $4.3 billion, respectively.

US remained the dominant source of OFW remittances with a 37% year-to-date share. The other main sources were Saudi Arabia, Singapore, United Arab Emirates, the United Kingdom, Japan, Canada, Hong Kong, Germany and Kuwait with a combined 78.4% share.

IMF cuts Philippine growth forecasts anew

THE INTERNATIONAL MONETARY FUND (IMF) has slashed further its gross domestic product (GDP) growth projection for the Philippines, adding to other groups that now expect the economy to miss the government’s targets for this year and 2020.

According to the October issue of the IMF’s World Economic Outlook, titled “Global Manufacturing Downturn, Rising Trade Barriers,” the Philippines’ gross domestic product (GDP) is now projected to grow by 5.7% this year from the six percent it gave in July, the 6.5% forecast it penciled last April, as well as 6.6% and 6.7% given in October and September last year.

GDP clocked in at 6.2% last year, and is targeted by the government to pick up to 6-7% this year and then to 6.5-7.5% in 2020 and 7-8% in 2021-2022.

For 2020, the IMF expects Philippine GDP growth at 6.2% from the 6.3% it gave in July and from its earlier projection of 6.6%.

It also gave a 6.5% projection for 2024.

The Philippines’ projection is a tad lower than the 5.9% given for Emerging and Developing Asia for this year, but better than the region’s six percent for 2020 and 2024.

But it is better than the 4.8% and 4.9% 2019 and 2020 projections for the five biggest developing Southeast Asian countries. In this group, only Vietnam will outpace the Philippines with a 6.5% forecast for both years. Indonesia (five percent and 5.1%), Thailand (2.9% and three percent) and Malaysia (4.5% and 4.4%) have lower projections.

The report, which cited the Philippines and China as Asia’s “significant reformers”, said “[g]rowth in 2019 has been revised down across all large emerging market and developing economies, linked in part to trade and domestic policy uncertainties.”

“Downside risks to the outlook are elevated. Trade barriers and heightened geopolitical tensions, including Brexit-related risks, could further disrupt supply chains and hamper confidence, investment and growth,” it added.

“Such tensions, as well as other domestic policy uncertainties, could negatively affect the projected growth pickup in emerging market economies and the euro area.”

Other multilateral lenders have scaled down their GDP projections for the Philippines, with Asian Development Bank slashing it to six percent and 6.2% for 2019 and 2020 (from 6.2% and 6.4% previously); and the World Bank giving a 5.8% projection this year, 6.1% for 2020 and 6.2% 2021 (from 6.4% for 2019 and 6.5% for both 2020 and 2021).

Other outfits have slashed their forecasts as well, with ASEAN+3 Macroeconomic Research Office downgrading its 2019 and 2020 forecasts to six percent and 6.4%, respectively (from 6.3% and 6.5% previously); S&P Global Ratings trimming it down to six percent and 6.2% for 2019 and 2020, respectively (from 6.1% and 6.4%). MOODY’s Investors Service also slashed its projection to 5.8% for 2019 from six percent previously.

“One of the biggest factors is low investment due to slower government spending, a result of the delayed national budget. The weak external environment because of the trade conflict may also have been cited but export performance has been positive. However, the softer import performance this year has been a confirmation of lower government expenditure,” UnionBank of the Philippines Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort pointed out in an e-mail that “[t]he declining trend in both local inflation and local interest rates have kept some consumers, businesses/investors, government and other institutions on the sidelines earlier this year, while waiting for interest rates to go down further, before they become more aggressive in their borrowings/financing… as manifested by relatively slower growth in loans and domestic liquidity/M3.”

For his part, Bank of the Philippine Islands Lead Economist Emilio S. Neri cited growing risks to global economic activities. “Global headwinds have been more forceful than many economists had expected with surprises from Hong Kong, Great Britain and of course the unexpected magnitude of escalation of protectionist policies worldwide,” he said in an email to BusinessWorld. “With threats of weaker performance in agriculture and food manufacturing resulting from the collapse of rice farmgate prices and the weaker performance of the livestock sector due to the African swine fever, a catch-up in government spending and improvement in private sector confidence even becomes more crucial. The safety nets for the rice farmers need to be rolled out more quickly to cushion the impact of falling incomes.”

In the face of delayed government spending due to the three-and-a-half month delay in 2019 national government enactment last Apr. 15, ING NV-Manila Nicholas Antonio T. Mapa is of the view that household consumption may have to do the heavy lifting to cushion slow investment activity. “Thus, the economy will have to bank on household consumption to do the heavy lifting and offset still-likely subdued investment activity while government spending looks to rebound after the budget was finally passed… Fortunately, inflation has decelerated quickly to give consumption a power boost while latest government spending data have returned to growth. — Luz Wendy T. Noble

BSP slashes mandatory bond reserve

THE BANGKO SENTRAL ng Pilipinas (BSP) has moved to make local bonds issued by banks and quasi banks (QBs) more attractive to investors by reducing the reserve requirement rate (RRR) for such debt by 300 basis points from six percent currently, effective Nov. 1, according to an official statement on Tuesday.

“The Monetary Board approved the reduction in the reserve requirement rate for bonds issued by banks/QBs to three percent as part of its commitment to contribute to deepending of the local debt market,” the BSP said in its news release, noting that the new rate will be lower than reserves mandated for other debt instruments issued by banks like long-term negotiable certificates of time deposits (LTNCDs) currently at four percent.

“The lower bank reserves on bond issuances is expected to reduce bond issuers’ intermediation cost that could be passed on to holders of such securities,” the central bank explained.

The BSP said this latest move complements its streamlining of rules and requirements for banks’ and quasi banks’ issuance of debt instruments.

“These initiatives are intended to incentivize banks/QBs to tap the domestic bond market as part of liquidity management,” the central bank said.

FOR BANKS AND INVESTORS
Sought for comment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail that the bond RRR cut “effectively reduces banks’ intermediation costs that would provide banks greater leeway to increase commensurately interest rate returns or yields paid to bondholders, effectively giving greater incentives for investors to put more money on bonds issued by banks.”

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said “[t]his will provide financial institutions more room to access credit markets.”

“This will provide more liquidity to financial firms and more funds means more opportunities for expansion and economic activities,” he explained in an e-mail.

The move is also a way for the BSP to encourage banks to opt for bonds as a funding source, according to ING NV-Manila senior economist Nicholas Antonio T. Mapa.

“BSP is looking to prod banks to source funding via bond issuances and wean them from LTNCDs, with the central bank looking to halt fresh issuances of the instrument in the near term,” Mr. Mapa said in an e-mail, noting that LTNCDs are currently tax-exempt. — Luz Wendy T. Noble

MPHHI gets investment from KKR, postpones IPO

By Denise A. Valdez, Reporter

THE ANTICIPATED P83.3-billion initial public offering (IPO) of Metro Pacific Investments Corp. (MPIC)’s hospital unit — which was supposed to be the biggest listing in the Philippine Stock Exchange to date — is delayed indefinitely from its earlier fourth-quarter schedule as the company welcomed an investor that poured P35.3 billion into the company.

MPIC told the stock exchange yesterday it had signed “certain definitive agreements” for Metro Pacific Hospital Holdings, Inc. (MPHHI) with a consortium led by United States-based Kohlberg Kravis Roberts & Co. (KKR). The group is joined by Arran Investments Pte. Ltd, an affiliate of GIC Private Ltd., the sovereign wealth fund of the government of Singapore.

“After much consideration we believe we have found the best way forward for Metro Pacific Hospitals and MPIC with this new partnership with KKR,” MPIC President and Chief Executive Officer Jose Ma. K. Lim said in the statement. “While we have decided for now to postpone the initial public offering for Metro Pacific Hospitals, I thank all the people involved in helping with this effort.”

The transaction involves the consortium’s investment in new common shares of MPHHI made by KKR subsidiary Buhay (SG) Investments Pte. Ltd. through a share subscription agreement and in a mandatorily exchangeable bond issued by MPIC, made also by Buhay SG.

MPHHI sold 41.37 million new common shares to the consortium, or 2.74% of the company’s resulting outstanding capital stock and 6.25% of its aggregate par value, valued at P5.2 billion.

It said proceeds from this transaction will be allocated to opening additional hospitals and new healthcare businesses, aside from growing its existing subsidiaries, associates and joint ventures.

For MPIC, the consortium bought a P30.1-billion mandatorily exchangeable bonds, which it may trade for 239.93 million common shares in MPHHI within 10 years or upon its IPO, whichever comes sooner. Proceeds from this transaction will be used to reduce bank borrowings of MPIC.

“I am delighted that we are able to announce this new partnership in the healthcare sector… KKR’s record of assisting transformational businesses is well known, and our plans for the future of Metro Pacific Hospitals are ambitious,” MPIC and MPHHI Chairman Manuel V. Pangilinan said in the statement.

The deals are scheduled to close by the end of the year once corporate and regulatory consents have been secured. It will result in MPIC’s hold in MPHHI shrinking to 20% or 132.59 million common shares on a fully-diluted basis.

Bank of America Merrill Lynch and UBS Group AG are the financial advisors to both MPIC and GIC for the transaction, while Milbank LLP and Picazo Buyco Tan Fider & Santos will serve as their legal counsels. KKR’s legal counsels will be Simpson Thacher & Bartlett LLP and Sycip Salazar Hernandez & Gatmaitan.

If the company had proceeded with its IPO plan, MPIC would have raised P5.95 billion in net proceeds from its primary offer and P75.1 billion in net proceeds from the secondary offer.

For Timson Securities, Inc. Trader Jervin S. De Celis, MPIC made the right decision to delay the IPO for MPHHI, as this would give the company a higher financial capacity to invest in other business segments.

“I think the entry of global investment firm KKR to MPHHI is positive for Metro Pacific, although the latter’s ownership in its hospital arm will shrink,” he said in a mobile message. “KKR’s subscription to MPIC’s exchangeable bonds worth P30 billion can be used by Metro Pacific to trim its debts.”

Diversified Securities, Inc. equities trader Aniceto K. Pangan concurred, saying in a text message it is “wise” for MPIC not push through with the IPO as “they have to wait for the proper time.”

But he noted the decision may take a toll on the company’s net income. “As of last quarter, we saw how their high debt exposure has affected their bottom line. Thus, we will continue to see how this will negatively affect their net income going forward,” Mr. Pangan said.

MPIC is 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, which it controls.

Vehicle sales climb in Sept. as demand recovers

VEHICLE SALES recovered in September after last month’s decline, the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) reported on Tuesday.

Data jointly released by the groups yesterday showed overall sales in September grew 2.3% to 31,820 units from 31,116 in the same month last year, and by 7.5% from 29,599 in August.

CAMPI president Rommel R. Gutierrez said in a statement that the group expected recovery coming into the last quarter of the year.

“September is traditionally the start of an upward trend in sales as the public begin to spend for the upcoming holiday season,” he said.

“Indeed, we welcome this positive growth as this is a good indicator of the increasing and widening demand for vehicles that has been the trademark of our industry. We are optimistic that the industry is well-positioned and prepared to progressively get back on track towards strong positive growth in the coming months.”

Car sales in September last year saw a 9.7% year-on-year drop as the industry slumped from higher excise taxes that took effect early in 2018.

CAMPI said it remains positive that the automotive sector will post “continuous positive growth” in sales for the rest of the year.

Broken down, September sales of commercial vehicles this year — which account for 69.45% of the market — went up by two percent to 22,099 from 21,675 in the same month last year. Asian utility vehicle (AUV) sales grew by 14.2% to 3,341 from 2,926 while light commercial vehicle (LCV) sales declined by 0.8% to 17,488 from 17,626.

In turn, passenger vehicle sales grew three percent to 9,721 from 9,441 last year.

Year-to-date, the passenger car segment saw sales drop by 1.1% to 80,317 from 81,182 sold in the same nine months last year, while commercial vehicle sales climbed 3.9% to 187,047 from 179,979. Meanwhile, AUV sales dropped by 31% to 26,348 from 38,181, while LCV sales rose 14.9% to 150,436 from 130,977.

Toyota Motors Philippines Corp. (TMP) retained its top spot in terms of vehicle market share at 42.3%, selling 13,460 units during the month or 6.1% more than a year ago, the CAMPI-TMA report showed.

This was followed by Mitsubishi Motors Philippines Corp. which had a 15.63% market share in September, even with its sales for the month dropping 21.1% to 4,973 units from 6,305 last year.

Nissan Philippines followed with a 14.98% market share as its vehicle sales went up 21.8% to 4,768 units in September from 3,916 in the same month last year.

At fourth place in terms of market share for the month was Suzuki Philippines, Inc. as it sold 6.83% of the total, with sales growing 25.8% to 2,174 units from 1,728 a year ago. Ford Motor Company Philippines Inc. came next with a 5.13% market share, reporting a 5.4% decline in sales to 1,632 units from 1,725 in the same month last year. — Jenina P. Ibañez

The show must go on

SHORTLY PAST midnight on Oct. 2, the Star City Complex in Pasay City caught fire. Aside from the amusement park’s rides, the inferno, which lasted for 14 hours, also consumed the Aliw Theater — the home of Ballet Manila for nearly 20 years.

Yet a little past 1 p.m. on Oct. 5, Akira Ida was rehearsing her solo for Ballet Manila’s production of Jules-Henri Vernoy de Saint-Georges and Théophile Gautier’s romantic ballet Giselle. She, along with her fellow dancers, were doing a run-through of Act 2, where she would be dancing as Myrtha, Queen of the Wilis. Rehearsals for the show had been going on since June in preparation for the show in October, and the fire would not stop them.

The show must go on.

RISING FROM THE ASHES
Prima ballerina and Ballet Manila artistic director Lisa Macuja Elizalde was wearing a gray T-shirt with the words “Rise like a phoenix” superimposed on a graphic of a dancer and the mythological bird who is born again from the ashes of its own destruction. She has the shirt in three colors she told BusinessWorld at the Ballet Manila offices in Pasay City last week.

She put on a big smile when we greeted her a belated happy birthday, followed by a faint, “Thank you.”

Her birthday was on Oct. 3, the day after the fire.

After the blaze, Ballet Manila vowed to dance and continue with its 24th season.

“The initial reaction really was to cancel Giselle and refund the tickets,” Ms. Macuja Elizalde recalled in a quiet tone. “When Star City was burning, I was trying to call the [orchestra] conductor not to come anymore, but he had already left. He was already in Istanbul waiting for his transit flight to Manila. When he arrived later that day, buti na lang (It was a good thing), I could tell him that we were going to have one show.”

This was because the cultural community rallied behind its stricken member.

“That morning I got a call from [Cultural Center of the Philippines Vice-President and Artistic Director] Chris Millado offering the CCP Main Theater,” she explained, adding that upon confirmation of the available dates, she approached a board member of the Manila Symphony Orchestra — which was supposed to perform with the dance company for Giselle — and made a request for a discounted rate. She got it.

“[CCP Chairperson] Margie Moran-Floirendo offered to lend us the backdrops of Giselle from Ballet Philippines because our backdrops burned in the fire,” she continued. “By noontime of Oct. 2, I already had everything in place for one [performance of] Giselle.”

Giselle will be staged on Oct. 17, 8 p.m., at the CCP Main Theater. It is the second ballet in the lineup of Ballet Manila’s 24th season, “On Pointe.”

The romantic two-act ballet follows Giselle, a peasant girl who falls in love with Albretch, deceitful nobleman who disguises himself as a villager. Then Giselle finds out that Albretch is betrothed to another woman, her heart breaks and she dies. Albretch is then targeted by the Wilis, the spirits of maidens who died after being betrayed by their lovers. They take their revenge by dancing men to death by exhaustion. But Giselle, risen from the grave, saves him, and in the process saves herself.

Playing the leads in tomorrow evening’s performance are Joan Emery Sia as Giselle; Elpidio Magat as Albretch; and Mark Sumayo as Hilarion. Joshua Enciso and Nicole Barroso are performing the pas de deux, and 24 company dancers play the Wilis. The Manila Symphony Orchestra will provide live music under the baton of Maestro Alexander Vikulov.

VIP, Ballet Manila subscribers, and audience members who had previously bought tickets to the Aliw Theater performances (originally scheduled on Oct. 19 to 20) will have their tickets exchanged for orchestra center seats on the Oct. 17 performance at the CCP.

“We are honoring all tickets that have been sold for all three performances in Aliw [Theater]. If they cannot go, we are ready to refund,” Ms. Macuja Elizalde said.

Tickets to the Oct. 17 show are still available at TicketWorld at their original prices.

HOPEFUL FOR A SECOND SHOW
Ms. Macuja Elizalde is hopeful that they will have a repeat performance of the romantic ballet.

“I am hopeful for performances of Giselle that will enable all our other casts of Giselle, Albretch, and Myrtha to perform because they have worked so hard and prepared psychologically, emotionally, and physically [for the roles],” she said, adding that the three leads are dream roles for any ballet dancer.

Repeat performances will depend on venue availability and audience demand.

“There is nothing like answering the clamor for a repeat performance. That is a dream for any ballet company,” she said.

MOVING FORWARD
Meanwhile, performances of Sleeping Beauty originally scheduled in December have been postponed; while the two other ballets scheduled for this season, Carmina Burana and La Traviata, will be presented next year depending on the availability of another venue — these will be scaled down performances danced to recorded music.

“As the choreographer of the last ballet of the Princess Trilogy (following Ballet Manila’s Cinderella and Snow White), it did not make sense [for me] that the finale of the trilogy would go to any other venue,” Ms. Macuja Elizalde explained.

“I want it to open the new Aliw Theater once it is rebuilt and restored,” she declared.

“It’s a matter of making sense in all aspects and also financial sense… It’s a period of adjustment for everyone. But we’re trying as much as possible to deliver on what we fully intended,” she added.

Regarding the options for performance venues, she laughed and said, “Maraming possibilities.”

But when the new Aliw Theater will open remains uncertain. “I really don’t know. I cannot say.”

While the theater did not burn to the ground, unlike the nearby Star Theater, it was heavily damaged. “We still need to prove that the building is safe,” she said. “Once all of that is assessed, we can create a timeline.”

She remains optimistic: “We are taking the necessary steps to be able to continue on and survive this, because it’s [going to] get better… I’m pretty sure it’s [going to] get better, especially once we get our theater back.”

Ballet Manila will continue to dance for the love of their art.

“We will let our art uplift us all,” Ms. Macuja Elizalde said. “That is one of the functions of art in society — it is to uplift the human spirit.”

With conviction she assured that tomorrow night, “We’re going to give a really, really good show of Giselle.” — Michelle Anne P. Soliman

For inquiries, e-mail info@balletmanila.com.ph, contact 09188077148, or visit www.facebook.com/BalletManilaOfficial/. Tickets are available at TicketWorld (www.ticketworld.com.ph, 891-9999). Ticket prices start at P300.

Century Pacific signs deals to export products to Russia

CENTURY PACIFIC FOOD, Inc. signed $12.57-million worth of new deals with four Russian food firms to export its tuna, sardine and coconut milk products to the country.

In a disclosure to the stock exchange yesterday, the company said it signed separate memoranda of understanding with food retailer Magnit Food Retail Chain, dairy supplier Dalimo and canned seafood distributor LLC Dalpromryba to supply tuna and sardine products to the companies. It also signed a deal with agriculture crop manufacturer Panasia Impex Co. Ltd. for its coconut milk products.

“Russia is an attractive market for us because of its large, increasingly affluent, and highly educated population,” CNPF Chief Operating Officer Gregory Francis H. Banzon was quoted as saying in the statement.

“The supply agreements will help us build a global consumer base for our flagship brand Century Tuna, which is already gaining traction abroad, and grow as well our emerging coconut milk business,” he added.

The deals made with the Russian companies were among the business agreements made when President Rodrigo R. Duterte visited the country earlier this month.

Cabinet Secretary Karlo Alexei B. Nograles said having such agreements made during the presidential visit is proof of the government’s support for tuna producers to expand its foreign market.

“The trip of the President was very productive, and these agreements were one of many that will benefit Philippine business interests, especially those that are based in Mindanao,” he was quoted in the statement as saying.

The country is currently the top exporter of tuna in Spain, Germany and Britain, with annual tuna exports reaching 171,452 metric tons worth $492 million.

Century Pacific posted a net income of P1.71 billion in the first six months of the year, 8.78% higher from in the same period last year, as revenues increased 5.77% to P19.61 billion due to the high demand for its food products Century Tuna, 555 and Birch Tree. — Denise A. Valdez

The new MoMA is all about surprise

By James Tarmy, Bloomberg

WALKING THROUGH near-empty galleries of the expanded Museum of Modern Art (MoMA) in New York on its first day of press previews, I experienced serendipity at the MoMA for the first time ever. I turned a corner and stumbled across a vitrine with Meret Oppenheim’s fur cup from 1936 in front of Frida Kahlo’s from 1940; I walked to the left and was suddenly in front of Henri Matisse’s superstar work, Dance (I), from 1909.

It’s a combination of paintings, sculptures, and time periods that could never have existed in the old MoMA, where chronology and media were rigidly enforced. Visitors would walk from one gallery to the next as the museum’s slow, steady interpretation of modernist art history chugged onward.

“We want gallery goers to move in different directions and to determine their own paths,” says Liz Diller, a partner in the architecture firm Diller Scofidio and Renfro, who, with the megafirm Gensler, designed the museum’s $450 million renovation and expansion. “The institution shouldn’t prescribe everything for you. I personally feel like having more agency, having an ability to interpret things myself and stop — go backwards or forwards — is a good thing.”

This sounds fairly simple to achieve: Don’t put galleries in a one-directional loop. Yet it eluded architect Yoshio Taniguchi in the 2004 extension of MoMA. He created a visitor experience similar to being at a no-reservation Sunday brunch: you were either waiting for people to get out of the way or acutely aware that other people wanted you to do the same. Quiet contemplation was out of the question.

The 47,000-square-foot expansion has upended that assembly-line sensibility by pulling the focus — and visitor flow — away from what used to be the museum’s core; Diller says they opted to keep the addition’s ceiling heights the same as those in existing galleries in order to “expand all those spaces, and to not make it feel like an abrupt change,” she explains. Total gallery space after the expansion is 166,000 square feet.

The museum will officially reopen on Oct. 21 with a permanent-collection-only show that encompasses the whole building. Much has been made, by both curators and critics, of the fact that this is the first time that MoMA has upended a rigidly chronological approach to modernism, choosing instead to pair artworks based on aesthetic similarities (or dissonances), thematic parallels, or formal preoccupations.

“These are not random juxtapositions, these are carefully thought-through conversations that we are trying to enable,” says Glenn Lowry, the museum’s director. “Part of it is in order to arrive at a reasonable balance between the collection that’s in storage — about 200,000 works of art — and the collection that’s on display, which is roughly 2,500 works of art.”

For museum goers who either can’t find — or aren’t interested in finding — these conversations, wall text does a lot of the heavy lifting. In the “Transfigurations” room on the second floor, the opening text informs us that “The works brought together in this gallery suggest a dialogue between artists across nations and generations who have reimagined how women might be represented.” In the “In and Around Harlem” room on the fourth floor, readers will learn that “The fusion of art and politics defines these artists’ contributions to the traditions of figurative art in the twentieth century.” And even though the text can occasionally get jargon-y (“Architectural projects were conceived of as interactions of variable components that would allow for change over time,” reads the text in the fourth floor’s Architecture Systems room), they’re largely useful and user-friendly.

Close scrutiny of this new, hybrid approach to curation yields some sublime juxtapositions. On the third floor, for instance, there’s a Lewis Hine photograph from 1908 titled Sadie Pfeifer, a Cotton Mill Spinner, Lancaster, South Carolina, which depicts a very young girl working in a factory; it’s hung next to dreamy 1895-6 painting by Édouard Vuillard of a bourgeoise woman in her living room, working on a lap loom. It’s not a subtle comparison, but it’s effective.

Or on the fifth floor in a gallery devoted to “new expressions in Germany and Austria,” two monumental stone figures from 1911 and 1913 by Wilhelm Lehmbruck are surrounded by portraits by Egon Schiele, Oskar Kokoschka, and Gustav Klimt. Not only were these artists contemporaries, they collectively chose to elongate, and arguably, emaciate the human body. In the old museum layout, such an obvious and interesting combination of painting and prints and sculpture would be extremely rare.

Still, for all its successes, the museum’s strategy has more than a few stumbles. It turns out that putting two artworks in a room together does not guarantee “dialogue,” just as one person shouting in French and another person whispering in English is not, in fact, a conversation.

Take Picasso’s 1905-6 Boy Leading a Horse, one of the artist’s masterpieces and a cornerstone of the museum’s collection.

Why put Louise Bourgeois’ wooden cluster of abstract, painted totems Quarantania I, from almost a half-century later, next to it? The wall text doesn’t help. Rather than justify the sculpture’s presence, it stretches to associate the work with another Picasso, Les Demoiselles d’Avignon, which is on the far side of the room.

Similarly, the charming Portrait of My Mother from 1926 by the eccentric modernist Florine Stettheimer is paired with Bitches Brew, an abstract collage from 2010 by the boundary-pushing contemporary German artist Jutta Koether, presumably because one includes a woman in a dress, and the other includes deconstructed elements of fancy dress. If that’s where their similarities end, the pairing isn’t as much a “conversation” as it is word association.

The good news is that the permanent collections will constantly be rehung — 30% of the objects will be changed every six months. It’s part, Lowry says, of the museum’s continual evolution.

“We’re about to be 90 years old, and we’ll have undergone nine major moves and expansions,” he says. “Every decade something changes, and that’s given us our DNA.”

Despite the exhibition’s flaws, the museum’s identity is clearer and more compelling than it’s been in decades. The expansion is a genuine step forward, rather than a mere augmentation of what’s already there. So what’s next?

“The only thing I know,” Lowry says, “is the 10th [expansion] won’t be me. Someone will come along and almost certainly say: ‘Whatever they did in 2019, we need to do something different in 2029.’”

MRT-3 deploys one China-made train set

THE METRO RAIL Transit Line 3 deployed one Dalian train set equivalent to three train coaches yesterday. — BW FILE PHOTO

THE METRO RAIL Transit Line 3 (MRT-3) was set to deploy on Tuesday one China-manufactured train set, which is equivalent to three train coaches and can carry 1,050 passengers per trip.

“Starting today, 15 October 2019, one Dalian train set will hit the tracks of MRT-3 mainline during evening off-peak hours, from 8:30 p.m. to 10:30 p.m.,” the Department of Transportation (DoTr) said in a statement on Tuesday.

This comes after Sumitomo Corporation—Mitsubishi Heavy Industries Ltd. (MHI)—TES Philippines, Inc. (TESP), the maintenance provider of the MRT-3, approved last Monday the limited deployment of one train set from CRRC Dalian Company Ltd.

“The said consent indicates that the train set will be deployed for an initial trial period lasting up to when the maintenance provider begins its rail replacement works in November 2019,” the DoTr said.

The agency said officials from the maintenance provider and the DoTr MRT-3 are currently discussing the “technical considerations, especially when rail replacement works ramp up in the next few months.”

The Japan International Cooperation Agency (JICA), which funds the development of the Philippine railway system including the MRT-3, has given its concurrence to the Dalian Trains Agreement with Sumitomo, the DoTr also said.

“Currently, three Dalian trains (9 train coaches) sets have already completed the necessary commissioning and validation tests including the 150-hour run. Each Dalian train set has a three-car configuration that can carry 1,050 passengers per trip,” it said further.

Asked why the new train set is only operational during evening off-peak hours, DoTr Assistant Secretary Goddess Hope Oliveros-Libiran told reporters via Viber: “We are balancing the requirements for fixing the degraded existing system and on the other hand, expanding capacity with the addition of Dalian trains. The reason for that is because capacity is not just additional trains. Capacity is also faster speed and shorter headways, which require us to rehabilitate the tracks and fix and upgrade the signalling system.”

She added that there’s no hesitation on the part of Sumitomo to use the Dalian trains. “There’s no hesitation. Sumitomo just needs to study how to operate the Dalian trains,” she said.

Also on Tuesday, the DoTr MRT-3 said a street vagrant died after he jumped over and fell at the inter-station of tracks of Buendia and Ayala at 12:16 in the afternoon.

The train movement was shortly regulated and went back to normal at 2:47 p.m.

“The matter was addressed by concerned MRT-3 personnel, medical personnel, and police authorities,” the DoTr MRT-3 said. — Arjay L. Balinbin

Gov’t fully awards 5-year bonds

Bureau of Treasury (BoT)
THE TREASURY made a full award of the five-year bonds it offered on Tuesday.

THE GOVERNMENT fully awarded the fresh five-year Treasury bonds (T-bond) it offered during its auction yesterday, even opening its tap facility to accommodate excess demand from investors.

The Bureau of the Treasury (BTr) raised P20 billion as programmed from its T-bond offer on Tuesday, with total tenders reaching P63.2 billion or more than three times the initial offer.

The five-year papers fetched a coupon rate of 4.25%, which was 122.5 basis points (bp) lower compared to the 5.452% average rate fetched during the previous issuance of fresh five-year papers back in March 6, 2018.

This prompted the BTr to open its tap facility for another P10-billion offering following the huge demand from investors, as well as to fill the gap from the bid rejections they made during previous auctions.

“Given the huge demand in today’s auction, we saw that there are a handful of bids unserved at the 4.25% level so we decide to open the tap for P10 billion… And one other reason is we would also like to cover for past rejections just to fill in that hole in the previous auction,” Deputy Treasurer Erwin D. Sta. Ana told reporters after the auction on Tuesday.

The government last offered five-year T-bonds on Nov. 21 last year, where it auctioned off P15 billion in reissued papers with a remaining life of four years and three months. It made a full award of the offer. The bonds, which carry a coupon of 5.5%, were issued at an average rate of 7.003%.

At the secondary market on Tuesday, the five-year notes were quoted at 4.37%, based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s website.

Mr. Sta. Ana said the auction result was expected following the Bangko Sentral ng Pilipinas’ (BSP) announcement of another 100-bp cut in banks’ reserve requirement ratios (RRR), which will take effect in November, as well as the upcoming maturity of government securities worth P197 billion.

“The announcement of an RRR cut on bonds this morning prompted the rally on belly bonds, making the 4.25% rate that the new 5-76 bond fetched attractive relative to the rest of the bond curve,” Carlyn Therese X. Dulay, first vice-president and head of Institutional Sales at Security Bank Corp., said on Tuesday.

The BSP 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.

Yesterday, the central bank said the Monetary Board approved the reduction in the reserve requirement rate for bonds issued by banks and quasi-banks (QB) to three percent effective next month in a bid to deepen the local debt market.

This rate is lower than the required reserves of other debt instruments issued by banks such as long-term negotiable certificates of time deposits which is currently at four percent.

“The lower bank reserves on bond issuances is expected to reduce the bond issuers’ intermediation cost that could be passed on to the holders of such securities. The adjustment in the required reserves for bonds complements the BSP’s earlier policy issuance streamlining the rules and requirements for the issuance of debt instruments by banks/QBs. These initiatives are intended to incentivize banks/QBs to tap the domestic bond market as part of its liquidity management,” the BSP said.

Ms. Dulay added that previous comments from the Treasury that there will be no more issuance of retail Treasury bonds this year prompted players to put their investments in other facilities.

“The recent statement of the BTr regarding their decision not to issue a retail Treasury bond this year also emboldened market participants to put their excess cash to use,” she said.

BORROWING APPROVALS ON TRACK
Meanwhile, Mr. Sta. Ana said the BTr is “on track” with their requests for approvals for its planned offshore and domestic borrowings next year.

“We started the request for approvals so we will be expecting some comments, let’s say from BSP, moving forward. So we are on track with respect to seeking approvals on this, both domestic and foreign,” the official said.

He declined to disclose the volume but said “it’s supposed to cover all foreign commercial borrowings for 2020.”

Asked on the possible offshore markets that they will tap next year, he said they will still consider the usual sources such as the euro, dollar, panda and samurai bond markets, but will remain “flexible” as they look for “new opportunities” from other markets such as the Swiss bond market, among others.

“Basically the same markets that we have been issuing in, and there’s a little bit flexibility if there are new opportunities in other markets. For example, Swiss francs, we may also look at that more closely and other markets, I just cited one but I think there could be other markets,” Mr. Sta. Ana said.

The government is set to borrow P220 billion from the local market this quarter, broken down into P100 billion in Treasury bills and P120 billion via T-bonds.

It is looking to raise P1.189 trillion this year from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — B.M. Laforga

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