ABS-CBN to further expand digital presence after YouTube success

October 12, 2020 | 12:05 am

ABS-CBN Corp. will further expand its digital presence after the Youtube channel of its entertainment show hit 30 million subscribers, the listed media company said.

It said its online entertainment page had become the “second most subscribed” Youtube channel in Southeast Asia after gaining 30 million subscribers.

“ABS-CBN Entertainment has also logged 38.8 billion lifetime views, ranking first among the most watched YouTube channels in the Philippines and tenth in the world as of October this year,” it said in a statement at the weekend.

ABS-CBN said it would further expand its digital presence to reach as many viewers as possible and produce content that gives them “entertainment, inspiration, and relief.”

The other Youtube channels of ABS-CBN are also “among the most subscribed and most viewed in the country, namely ABS-CBN News (10.4 million subscribers and 6.6 billion views), Star Music (5.6 million subscribers and 2.3 billion views), Pinoy Big Brother (3.6 million subscribers and two billion views), Star Cinema (3.3 million subscribers and 1.1 billion views), The Voice Kids Philippines (2.5 million subscribers and 1.4 billion views), and The Gold Squad (2.4 million subscribers and 204.7 million views),” it added.

ABS-CBN started airing on Saturday some of its entertainment shows on the A2Z channel 11, which is operated by broadcast media company Zoe Broadcasting Network, Inc.

Channel 11 is seen on analog TV in Metro Manila and nearby provinces.

ABS-CBN said its agreement with Zoe Broadcasting involves the provision of entertainment, public service, and educational content.

The agreement with Zoe Broadcasting comes after the resignation of Eugenio Gabriel “Gabby” L. Lopez III as ABS-CBN chairman emeritus and director, citing “personal reasons.” — Arjay L. Balinbin

Treasury bills to fetch lower rates on strong liquidity in the market

October 12, 2020 | 12:05 am

RATES OF Treasury bills (T-bills) on offer today (Oct. 12) may remain unchanged or move sideways as investors remain awash with cash and cautious over long-term securities.

The Bureau of the Treasury (BTr) will offer P20 billion worth of T-bills: P5 billion each in 91-day and 182-day securities and P10 billion in 364-day papers.

A trader said in an e-mail that rates for short-term debt papers may decline by five basis points (bps) or end flat as the market remains liquid.

“Investors will continue to put their cash in shorter tenors as they avoid looming risks, including lingering cases of the coronavirus disease 2019 (COVID-19) and lack of vaccine against it,” the trader said.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail that T-bills rates will continue to reflect liquidity among investors as there is now less concern on the inflation outlook.

“Shorter duration exposure can be attributed to sustained preference for liquid assets during the crisis period rather than higher inflation expectations. Until sellers’ volume recedes, the buy-on-dips strategy may prevail,” Mr. Asuncion said over the weekend.

The Treasury last week borrowed P22 billion via T-bills, more than its original program of P20 billion, as the government hiked its award of the smallest tenor to accommodate more small investors. The offering was almost five times oversubscribed, with bids reaching P98.858 billion.

Broken down, the government borrowed P7 billion via the 91-day T-bills versus its original program of P5 billion as it accepted more bids from small investors. The three-month papers fetched an average rate of 1.116%, down by 0.5 bp from the 1.121% seen in the previous auction.

The government also awarded P5 billion as planned in 182-day T-bills as tenders for the tenor totalled P29.164 billion. The six-month papers fetched an average rate of 1.6%, marginally lower than the 1.601% seen the prior week.

Lastly, the Treasury likewise borrowed the programmed P10 billion via 364-day papers as total tenders reached P44.459 billion. The one-year debt was quoted at an average rate of 1.8%, declining by 5.8 bps from the 1.858% fetched in the previous offering.

At the secondary market on Friday, the three-month, six-month and one-year T-bills fetched yields of 1.177%, 1.589%, and 1.827%, respective.

Meanwhile, inflation eased for the second straight month in September to its slowest level in four months on the back of moderating prices in the heavily weighted food and nonalcoholic beverages, the Philippine Statistics Authority (PSA) reported on Tuesday.

Preliminary PSA data showed headline inflation stood at 2.3% in September, the slowest since May’s 2.1%. This was also slower than the 2.4% seen in August, but faster than the 0.9% print in September 2019.

The latest reading, which matched the median estimate of 2.3% in a BusinessWorld poll, fell within the Bangko Sentral ng Pilipinas’ (BSP) 1.8%-2.6% forecast range for September.

Headline inflation averaged at 2.5% in the first nine months. This was higher than the BSP’s revised forecast of 2.3% for 2020 but within its 2-4% target.

The Treasury is looking to raise P140 billion from the domestic market this month: P80 billion in weekly T-bill auctions and P60 billion in fortnightly Treasury bond auctions.

The government wants to borrow around P3 trillion this year from local and foreign lenders to help fund its budget deficit expected to hit 9.6% of the country’s gross domestic product. — KKTJ

LANDBANK LGU loan approvals for palay procurement hit P4.3B

October 12, 2020 | 12:05 am

LAND BANK of the Philippines (LANDBANK) said it approved P4.3 billion worth of loans to local government units (LGUs) to procure palay, or unmilled rice, directly from farmers, one of the government’s measures to prop up weak farmgate prices.

In a statement, LANBDANK said it approved credit assistance to six LGUs under its “PALAY ng Lalawigan” lending program: Nueva Ecija, Isabela, Tarlac, and Camarines Sur province, the city of Cabanatuan, and the municipality of Alicia, Isabela.

“We are encouraging our LGUs to avail of the LANDBANK PALAY ng Lalawigan Lending Program to bankroll their direct engagement in the local rice industry value chain. It will be a big help to our local farmers whose incomes may have been affected, in one way or another, by the fluctuating farmgate prices of palay,” LANDBANK President Cecilia C. Borromeo said.

LANDBANK said the facility is available to municipal, city, and provincial governments in rice-producing provinces.

“Rather than sell to unscrupulous rice traders who offer very low prices, farmers can now sell their produce to the LGUs,” LANDBANK said.

Eligible LGUs may also use the loans to procure farm machinery and post-harvest facilities or fund other rice-related activities.

LANDBANK said the program’s short-term loan and permanent working capital offerings charge fixed interest of 2% per annum and are available until the end of 2022.

The term loan offering will charge 4%, subject to re-pricing.

Qualified LGUs may not exceed their Net Borrowing Capacity as set by the Bureau of Local Government Finance. — Revin Mikhael D. Ochave

The 28-year-old trying to upend Fashion Week

October 12, 2020 | 12:05 am

EVELYN MORA founded Helsinki Fashion Week in 2018 with the goal of disrupting an industry that she deemed woefully out of touch and rather boring.

The 28-year-old Helsinki native initially focused the show on sustainability by showcasing brands that could prove their green bonafides and hosting events in venues built with recycled materials.

And then when coronavirus disease 2019 (COVID-19) hit, she didn’t just broadcast the show online like other industry events, but instead took it into 3D. Models had their bodies scanned by computers to create avatars, and then designers, including Patrick McDowell and Tess van Zalinge, created digital clothes for them to wear down a virtual catwalk. Attendees, also using 3D avatars, visited shows and interacted in a so-called Digital Village. Bloomberg recently spoke with Mora about fashion and what comes next.

Q: What was the genesis of Helsinki Fashion Week?

A: I wanted to focus on building a test bed to test all the new innovations and try to implement them into the fashion industry powered by interdisciplinary professionals.

Q: OK, but how did you get to turning it into a 3D event this year?

A: The process basically started for me with grocery shopping online, where I would just be in this 2D screen and just click on products. And I was just bored. I wanted to enter the cyber space. So I started communicating with different architects and tech professionals to figure out how to do that.

Q: That’s a bold idea. How did you execute after that?

A: I started with the concept of a showroom. But I wanted to do an interactive 3D showroom instead of having hangers and racks around the room. Then the pandemic came. The most important part became creating partnerships between the 3D designers and the traditional designers to create one look. They had to actually really understand each other’s design processes and create one digital look.

Q: Wondering how the designers actually converted their creations into 3D?

A: After they designed their new collections, they had to digitize, make paper patterns and then digitize those patterns. And once they digitized the patterns, they would start putting it on the avatar. We had a partnership with a modeling agency and instead of just saying: “Sorry, guys, we’re going digital, we’re going to make avatars,” we decided to 3D scan the same models that were supposed to walk in Helsinki.

Q: What’s the bigger picture with digital tools, like 3D, and increasing access?

A: There’s a conflict in the fashion industry. We sort of have this exclusivity culture that if you’re not important enough, you don’t just get into the event. People are put into levels. The front row is for the most important people. The second row for the second-most important people. So it’s a bit of a hierarchical thing going on there.

But that can’t be the case anymore because everything has to be inclusive.

Q: What’s the case for high fashion using digital tools like 3D post Covid?

A: You can really reach new groups of people with digital. You can find new dimensions to your brand and a business model that can literally make your business bloom without you having to do things in a traditional way.

Because we are spending so much of our time online, we have an opportunity to create cyberspace as an online environment that makes that shopping experience much more exciting. — Bloomberg

State lacks cash to buy into SPEx stake in Malampaya – Gatchalian

October 12, 2020 | 12:04 am

THE PHILIPPINE GOVERNMENT does not have the cash now to buy into Shell Philippines Exploration, B.V.’s (SPEx) stake in the country’s sole natural gas field as the ongoing pandemic drained its financial resources, according to a senator.

The Udenna Group of Davao-based businessman Dennis A. Uy has called on the government to jointly acquire the 45% operating interest of the domestic exploration unit of Royal Dutch Shell in the Malampaya gas-to-power project under Service Contract (SC) 38.

For the group, the remaining partners in the project — UC Malampaya LLC and the Philippine National Oil Co.-Exploration Corp. (PNOC-EC) — are the “most suitable party to assume Shell’s interest.”

But according to Senator Sherwin T. Gatchalian, the chairman of the Senate’s energy committee, the government lacks the money to buy those shares as the budget deficit is high this year and the debt-to-gross domestic product ratio might expand more than 50% by next year.

“From a fiscal standpoint, we don’t have the cash to buy those shares because of COVID-19 (coronavirus disease 2019)… we don’t have the ready cash to buy the remaining shares,” the senator told reporters in a virtual briefing on Friday.

The government through PNOC-EC owns a 10% stake in Malampaya, while the Udenna group holds the other 45%.

Mr. Gatchalian, however, pointed out that buying into SPEx’s interest will provide the state a ready revenue source.

“We should not also discount the opportunity that it’s a ready-made cash flow for the government,” he said.

This year, the government, so far, received $11.7 billion in revenue share from the $4.5-billion gas-to-power project.

The PNOC exploration subsidiary said it was studying its position in the share purchase. In the meantime, it is readying a country-wide study of various sedimentary basins that bear potential oil and gas resources.

The planned sale of SPEx’s Malampaya stake comes as the Anglo-Dutch multinational firm is grappling with the pandemic’s impact.

In August, Pilipinas Shell Petroleum Corp., its locally listed firm, announced the permanent closure of its 110,000-barrel-per-day refinery in Tabangao, Batangas as margins worsened with the slump in demand. The refinery, though, will be converted into an import facility to continue supplying fuel for its customers in Luzon.

Shell will “ensure a smooth transition of the asset to a credible buyer who would be well placed to optimize the value from Malampaya,” SPEx General Manager Rolando J. Paulino, Jr. previously said in a statement.

Mr. Gatchalian wants SPEx’s successor as operator to have the technical expertise in running a gas platform, assuring the country that it will “not run out of natural gas in the immediate future.” It is expected that the natural gas depot will be completely depleted by 2027, according to estimates by the Department of Energy (DoE).

So far, Ramon S. Ang of San Miguel Corp. and Manuel V. Pangilinan’s group expressed their interest in buying the Malampaya stake.

The Malampaya field provided 3,200 megawatts of electricity, accounting for 21.1% of the country’s gross power generation in 2019.

Besides looking for other natural gas spots around the country, the government is also looking into liquified natural gas imports as an alternative.

Meanwhile, the present consortium is preparing its application with the government to extend its operations in the gas field beyond 2024, or the end of its service contract, Energy Secretary Alfonso G. Cusi earlier said. — Adam J. Ang

‘Kampai’ to three decades of Honda Cars PHL

October 12, 2020 | 12:04 am

2 new models and a commemorative book will underscore the celebration

WHAT IS your fondest memory of Honda? Mine is from way back in the mid-’90s — when the sixth-generation Honda Civic was the biggest craze, and the rust-colored Honda SiR was my aspirational vehicle. Memories from that period never fail to bring me tons of nostalgia. I was a student then; and everything JDM (Japan domestic market) was associated with automotive coolness.

Honda was leading the way then when it came to aftermarket compatibility and versatility. If you think about it, this was roughly 25 years ago. And this October, Honda Cars Philippines, Inc. (HCPI) — Honda’s official auto business unit in the country — is celebrating its 30^th birthday! They’ve had their highs and lows, having had to endure rough periods such as the Asian financial crisis, the huge earthquake in Japan (which crippled their production line for a time), and now, the COVID pandemic. But HCPI has historically pushed forward, overcoming all the challenges along the way. And this economic low due to the pandemic will not be any different.

“We plan to be here for the next 30 years!” exclaimed HCPI GM for Sales Atty. Louie Soriano.

Let us recall: Back in 1990, HCPI held its groundbreaking event for its first plant in Laguna. In 1992, it introduced its game-changing two-door Civic hatchback, and in 1994 it brought in the fifth-generation Accord. From its legacy models such as the Civic, Accord and CR-V, the company later brought in several more vehicular innovations that were a fit in our local market, such as the City, Mobilio and BR-V. Honda has since become a much-loved, highly aspirational brand with many Filipino loyalists.

In celebration of its 30-year milestone, HCPI decided to launch a 30^th anniversary commemorative book, which will be privately available beginning sometime in November.

Alongside the announcement of its commemorative book. HCPI also took the opportunity to introduce its new Country President, Masahiko Nakamura. Nakamura-san has had over 30 years of experience working with Honda’s automotive operations; and is thus very excited to lead Honda’s operations in the Philippines.

Finally, Honda Cars Philippines also revealed that it will be staging the launch of two new Honda vehicles this 22^nd of October. Stay tuned for next week’s revelation of what these two new models will be!

Congratulations HCPI for three successful decades in the Philippines!

China to maintain ‘normal’ monetary policy

October 12, 2020 | 12:04 am

CHINA WILL MAINTAIN “normal” monetary policy for as long as possible, according to the People’s Bank of China (PBoC) Governor Yi Gang.

Policy makers plan to encourage a “reasonable” increase in household savings and incomes, Yi wrote in an article published Saturday in the central bank’s biweekly magazine China Finance. The country will also make sure its liquidity stays somewhat ample, and will facilitate reasonable growth of money supply and social financing, while avoiding excess liquidity flooding the economy in order to reduce fluctuations, he said.

Most of the world’s major economies have rolled out fiscal and monetary measures to counter the effects of the coronavirus pandemic. Yi cautioned that excessive stimulus could lead to debt expansion and create asset bubbles that will increase longer-term systemic risks.

The governor also said financial institutions and their shareholders, local governments and regulators should take prime responsibility in dealing with risks. When unexpected events occur, shareholders at the respective financial institutions should assume the losses, and insolvent institutions should exit the market according to law, he said.

The central bank said last month it will make monetary policy more precise and targeted after the quarterly policy meeting. The PBoC called on lenders to make full use of structured monetary tools to increase the “directness” of its policies, and vowed to achieve a long-term balance between stabilizing growth and preventing risks.

The governor’s deputy, Chen Yulu, wrote in a separate article in the magazine that the bank will prevent inflation, debt expansion and asset bubbles from forming as a result of excessive liquidity. Such funds are meant to support economic growth.

Chen also wrote that China should increase financial support to the new-energy sector, including help firms in the industry expand overseas.

The PBoC will accelerate the digital currency’s research and trial usage in a controllable manner while ensuring payment security, according to Chen. No timetable was given. — Bloomberg

Bangsamoro agency signs 6 partnerships for agri ventures

October 12, 2020 | 12:04 am

DAVAO CITY — The Bangsamoro Development Agency (BDA) said it signed partnerships with six companies for various agriculture ventures that will showcase the economic potential of the autonomous region.

Former Moro Islamic Liberation Front (MILF) camps, which are undergoing transformation as part of the peace agreement with the government, are among the sites that will be developed as model farms and learning centers.

“This is our share in the peace building efforts being led by the government,” Antonio S. Peralta, chairman of the European Chamber of Commerce of the Philippines (ECCP)-Southern Mindanao Business Council in an online interview.

The signing of the agreements was one of the highlights of the ECCP-organized online forum, Planting the Right Seeds: Agricultural Investment Opportunities in Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) during this Pandemic, held September 30.

The six BDA partner companies and corresponding projects are: ACTI Global, Inc. for farm mechanization and equipment management; Noble Endeavors Mindanao, Inc./Ethical Harvest for a joint study and implementation of a goat milk processing facility as well as research laboratory; East West Seed International for vegetable production in tandem with coconut or cacao farming; Traxerve, Inc. for the establishment of rice demo farms and output consolidation among rice-producing communities; Earth Cube, Inc. for a waste-to-fertilizer plant in major BARMM cities; and Marine Algae Products, Inc. (MAPI) for seaweed production and processing sites in Tawi Tawi and Sulu to meet the requirements of MAPI’s markets in Australia and Europe.

“As an agricultural country in the midst of an uncertain pandemic, it is crucial that the value of locally-produced crops is understood… And while it is typical to look at this from an investment standpoint, a paramount issue would be sustaining peace in Mindanao, especially in BARMM, through building sustainable communities,” Mr. Peralta said. — Maya M. Padillo

Drive, skate, vote: Vuitton closes Paris Fashion Week with slogans

October 12, 2020 | 12:04 am

PARIS — French luxury label Louis Vuitton last Tuesday showed off its latest collection on the last day of Paris Fashion Week, featuring slogans splashed onto tops and dresses in pop colors — and which included a sweater stating “Vote.”

The look was the first one to cross the runway — housed inside a spectacular Art Deco building in Paris — and was followed by others like “Skate” or “Bounce,” on outfits with a skater-vibe.

The brand, owned by luxury goods conglomerate LVMH , provided no specific context for the slogans, though the show comes weeks before the US presidential election.

Vuitton’s womenswear designer Nicolas Ghesquiere said in show notes that the collection was focused on the increasingly fluid boundaries between genders, with some oversized T-shirt styles for instance which could be masculine or feminine.

“On some styles, prints are made up of words that are like positive injunctions,” Ghesquiere added. “I wanted to transliterate an energetic, vigorous, daring collection.”

Vuitton held the socially distanced show — one of only a handful of physical catwalk events in Paris this season due to the coronavirus pandemic — inside La Samaritaine, a recently renovated 150-year-old department store owned by LVMH.

It had been due to re-open around April but the launch was postponed after the pandemic hit, and the building is still not open to the public.

Models more oversized trench coats over some looks, paired with clog-style shoes, while other styles echoed a futuristic vibe often channeled by Ghesquiere, including crop tops with elaborate sleeves and shiny, silver jumpsuits.

Vuitton, which is known for the handbags that drive revenues at the brand, showcased some in bright green, and others with chunky chains as straps.

(View the show here: https://www.youtube.com/watch?v=6G7L4rpxQfI&fbclid=IwAR0YT-q59pLvgDayTC2kxLaORtHCLY4y4_bZmh4sCdlm0KcRKQ8gZKRZQNY)

HOLLYWOOD GLAMOR FROM CHANEL
French fashion label Chanel brought a touch of tinseltown to the Paris runway on Tuesday, with glamorous feathered gowns and a nod to the Hollywood sign, recreated to spell out the brand’s name.

Models paraded in and out of the giant “Chanel” lettering, transposed from the hills of Los Angeles to the interior of Paris’ Grand Palais exhibition hall, as guests perched on stools at the socially distanced show.

Chanel’s latest outing showcased inspiration drawn from Hollywood’s 1950s heyday — with a French touch.

A short film released before the show paid tribute to actresses such as Jeanne Moreau and Romy Schneider who caught the eye of American directors but also starred in French classics at the time.

Looks included off-the-shoulder evening gowns and feathered black-and-white dresses, while designer Virginie Viard — who took over last year from the late Karl Lagerfeld — brought out new twists on Chanel’s classic tweed suits.

Models wore tweed jackets over silky shorts, while shift dresses included trompe l’oeil details such as pockets on the back. The collection also featured dashes of bubblegum pink and logo-heavy pyjama style tops.

(View the show here https://www.youtube.com/watch?v=SVmqagGDv28&fbclid=IwAR3jctBMHPBnqVlRjaAjfRM3vYOFcfvGlE8JPlITV46_wEO3TZdytLdkfys)

A-listed guests included singer and actress Vanessa Paradis and her daughter Lily-Rose Depp. Chanel would normally invite its clients from around the world to attend catwalk shows, though many were absent due to travel restrictions linked to the pandemic. — Reuters

Court of Tax Appeals approves BIR, Zest-O deal on tax settlement

October 12, 2020 | 12:03 am

THE COURT of Tax Appeals approved the compromise agreement for tax settlement between the Bureau of Internal Revenue and Zest-O Corp.

In a nine-page decision dated Oct. 7, the court’s second division granted the joint motion for approval of compromise agreement as the parties complied with the laws and rules for an agreement.

“Accordingly, the Judicial Compromise Agreement entered into by the parties is approved and judgment is hereby rendered in accordance therewith. The parties are thus enjoined to faithfully comply with all the terms and conditions of the aforesaid Compromise Agreement,” the ruling read.

The case is now closed and terminated, the court said.

Under the agreement, the company offered to pay P78 million as a compromise amount to the BIR.

Zest-O filed a petition for review in 2016 for the cancelation of its alleged tax deficiencies including interest and compromise penalty for 2011 worth P232 million.

In December 2018, the parties filed the motion for approval of the compromise agreement, which was denied in February 2020 due to the failure to submit required documents.

The BIR then filed its compliance including true copies of documents showing that the compromise agreement was approved by the National Evaluation Board and the company filed its manifestation that it complied with the requirements which the court treated as motions for reconsideration.

The court reconsidered its denial of the agreement following the company’s compliance and submission of original copies of proof of payment of the company. – Vann Marlo M. Villegas

Toyota GR Supra GT Cup Asia PHL champs readying for Oct. 25 regional tilt

October 12, 2020 | 12:03 am

By Kap Maceda Aguila

THERE’S NO REST for the wicked — and the wickedly good. After annexing the crown in their respective categories of the GR Supra GT Cup Asia Philippines e-motorsport event staged by Toyota Motor Philippines (TMP) with partner Tuason Racing, Terence Lallave, Lance Padilla and Jose Luis Altoveros will now represent the Philippines in the regional finals.

The trio will be pitted against the best e-racers of India, Malaysia, Singapore and Thailand who also ran the gauntlet on the way to copping their own championship crowns. The regional finals will be held on Oct. 25 on three virtual tracks, according to Tuason Racing President JP Tuason. These are Fuji Speedway (Round 1), Tokyo Expressway (a fantasy track representing Tokyo streets [Round 2]), and the Nürburgring Nordschleife (Round 3). “I think we have a good chance of placing well in the regional finals. We have a strong lineup of drivers. We will prepare the drivers and with a bit of luck in the race, possibly get a podium position,” Mr. Tuason said.

“I would like to congratulate our three winners for pushing their limits and giving their best. Lance, Terrence and Jose, go and make us proud!” said TMP President Atsuhiro Okamoto.

As connectivity will obviously play a crucial part in the competition, TMP has tapped PLDT Enterprise as the official connectivity partner of Team Philippines “to ensure fast, seamless and lag-free internet connection, while the team races with the challengers from other Asian countries on the virtual tracks of PlayStation’s Gran Turismo Sport.”

In a statement, ePLDT President and CEO, and SVP and Head of PLDT and Smart Enterprise Business Groups Jovy Hernandez averred, “The current landscape has pushed all of us to come up with innovative ways to continue on with how we do things and technology has been a key enabler for many of these initiatives. With this, I would like to commend Toyota Motor Philippines for how they’ve pushed the envelope for racing through a groundbreaking virtual platform. We are proud to partner with you on such undertaking and we look forward to seeing how this will raise the bar for the local sports industry.”

Mr. Lallave is a 35-year-old businessman and social media influencer from Quezon City; Mr. Padilla is a 24-year-old aircraft mechanic and businessman from Bacoor, Cavite; and Mr. Altoveros is a 25-year-old writer and photographer from Quezon City.

Mr. Okamoto pleasantly noted in a virtual press conference with members of the motoring media that the GR Supra GT Cup Asia PHL has amassed more than 750,000 virtual fans, and 363 aspirants tried their luck.

Meanwhile, replying to a question from “Velocity,” TMP First Vice-President Sherwin Chualim said that while plans are afoot to hold the Vios Racing Festival (VRF) during the second half of next year (the event was canceled this year because of the pandemic), it will still depend on quarantine levels “whether (TMP) can actually hold a physical race.” He added that, for now, the GR Supra GT Cup Asia PHL will supplant the VRF until “it’s safe to resume.”

Finally, TMP PR and Communications Manager Elvin Luciano reported that the donations from TMP and fans of the e-motorsport series have reached almost P100,000. The sum will go to the beneficiary foundation: Students’ Transformation and Enrichment for Truth-Values Integration and Promotion.

Fans and supporters are enjoined to post messages of support to the team using #GRSupraGTCupAsia and #TeamPhilippines. For more information, visit facebook.com/toyotamotorphilippines, the GR Supra GT Cup platform on ONE Esports www.oneesports.gg/grsupragtcupasia2020/, or www.toyota.com.ph/gtcup.

Yuan’s haven status won’t stick until China relaxes controls

October 12, 2020 | 12:03 am

WHEN THE WORLD’S financial markets hit turbulence, could you really turn to China’s yuan as a store of value?

The idea of the yuan as a refuge has gained some traction in recent weeks as it capped its best quarter in 12 years relative to the dollar. That label would put it on par with currencies traditionally deemed as safe in a market downturn, like the Japanese yen or Swiss franc.

In addition to dollar weakness, the yuan is being underpinned by a wide interest-rate premium over the rest of the world, as well as signs that China’s economy is recovering from the shock of the pandemic. But unlike a haven, China’s tightly managed currency is gaining just as money flows into risk assets such as US stocks or high-yield credit. In other words, it is strengthening in a relatively benign market.

Buying the yuan as a shelter from market volatility isn’t new: in 2017, the Chinese currency proved to be a better bet than the yen when North Korea fired missiles into the Sea of Japan. But history also shows it’s a risky strategy — when the yuan showed haven-like resilience in early 2018, it slumped to a decade low that year after the Trump administration slapped its first tariffs on Chinese goods.

Considering the policy risk in China and its capital controls, viewing the yuan as a haven will be inappropriate, according to George Magnus, research associate at Oxford University’s China Centre.

“The yuan can be considered a ‘good trade,’ which is a cyclical phenomenon and has nothing to do with haven status — the conditions for that are largely unfulfilled,” said Mr. Magnus. “It is not and cannot be, as things stand, a viable alternative to the dollar or the euro, which have economic and institutional properties to which Xi’s China’s yuan cannot aspire.”

Yuan’s rally this year stokes discussion on whether it’s a haven currency

The central bank maintains a tight grip on its currency, and can often dictate its direction with the fixing which restricts movement by 2% on either side. The People’s Bank of China (PBoC) has recently allowed gains in the yuan, on Friday setting its daily reference rate at a stronger-than-expected level.

But on Saturday, the PBoC made betting against the yuan cheaper, a sign that it may be growing uncomfortable with the currency’s rapid appreciation. It reduced the cost of trading some foreign-exchange forwards, or derivatives often used to speculate against currencies, to zero from 20%.

A haven yuan would require China to have a more liquid financial market and open capital account, according to Eswar Prasad, a senior fellow at Brookings Institution. China would also need to show some of the key elements of an institutional framework, such as an independent central bank and a political system that’s typically associated with a democratic government, said Prasad, who once led the International Monetary Fund’s China team.

The Communist Party also controls the amount of money flowing out of the country, with citizens permitted $50,000 worth of foreign exchange purchases per year.

The yuan jumped about 4% in the three months through September, the largest quarterly gain since early 2008 and beating the Swiss franc and Japanese yen. The yuan is also particularly stable, with expected swings the lowest among 30 major exchange rates apart from the pegged Hong Kong dollar.

Haven or not, the yuan will likely stay strong given the attractive yield of China’s 10-year government bonds, which is at the highest since December. FTSE Russell, Bloomberg Barclays and JPMorgan Chase & Co. now include onshore bonds in their indexes, a move that will help attract steady capital inflows in the coming years. Bloomberg LP owns Bloomberg Barclays and Bloomberg News.

“Investing in China is likely to remain a good bet as the economy strengthens, and with it the renminbi’s value,” said Prasad, using the yuan’s official name. “But that does not mean the currency has become a safe haven. It is unlikely that the renminbi will be seen as a true safe-haven currency in the absence of more far-reaching institutional reforms, which appear unlikely.” — Bloomberg

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