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Hosting the 2030 Asian Games

Following the Philippines’ successful hosting of the 30th Southeast Asian Games, the Philippine Olympic Committee announced its intention to bid for the 2030 Asian Games. Other countries vying for the hosting rights are Qatar, India, Thailand, Taiwan, and Uzbekistan. If successful, this would be the second time the Philippines would host the Asiad — the first time being in 1954.

The Philippines is said to have a better-than fair chance of bagging the hosting rights given the strong support from government and availability of sporting venues. Also working to our advantage is our extensive experience in hosting international sporting events. Apart from having organized the 11th, 16th, 23rd, and 30th SEA Games, the Philippines also hosted the 2017 World Cup in Volleyball. In 2023, the country will again host the Basketball World Cup.

The Olympic Committee of Asia (OCA) may announce the winning bidder as early as the end of this year.

Hosting the Asiad is exactly what we need at this time. As an up and coming nation, the Philippines needs to overhaul its image and banish old stereotypes. From being perennially labelled as economically challenged and politically tumultuous, the time has come for us to be recognized as economically progressive, organized, reliable, and future-ready.

Hosting the Asiad will give us the platform to showcase whatever success we have mustered as a nation, our culture, our readiness for the future, and all the things that make us competitively unique. It is all about strengthening our “soft power” or our ability to gain supporters, followers, and cliques not by force or by money but by building a favorable reputation. Having soft power gives us a louder voice in the global arena and gravitas in geopolitical affairs.

After all, the Philippines is on track to become the 23rd largest global economy by 2030. It is only right that we act the part.

Apart from overhauling our image and the strengthening our soft power, hosting the Asiad promises a wealth of other benefits.

It will unite our people and foster national pride.

It will be a catalyst for economic growth. The experience of London and Sydney gives us an idea of the economic benefits a country can obtain by hosting Olympiads. The city of London invested $758 million to construct the facilities needed for the 2012 Summer Games. This amount was recovered three-fold through the sale of media rights alone which amounted to $2,569 million. Moreover, 20 million people visited the city and pumped $14 billion in cash into London’s coffers. Best of all, four billion people watched the opening ceremonies on television and this revolutionized London’s image from one that was old and staid to one that is culturally relevant. As for Sydney, its trade balance swung from a $1.3 billion deficit in August 2000 to a $677 million surplus during the month of the games.

Thousands of jobs will be created. In the case of Barcelona, 20,000 permanent jobs were created as a result of hosting the 1994 Summer Games. In Vancouver, 21,000 permanent jobs were generated from the boom in hotels, ski resorts, and restaurants as an offshoot of the 2010 Winter Games.

It will improve Infrastructure. Hosting the Asiad will provide the impetus to upgrade the country’s basic infrastructure such as roads, ports, transport systems, communication systems, and even disaster mitigation facilities. All these will improve the efficiencies of the host cities and benefit the local community who reside there. Moreover, it will set-up these cities nicely to host bigger events.

It will benefit tourism. The Philippines has some catching up to do when one compares our tourist arrivals against that of our neighbors. Hosting the Asian Games will give us the shot in the arm we need. In addition, millions of hoteliers, restaurants and shop owners will benefit from the influx of visitors.

It encourages the creation of new districts. As a result of the 30th SEA Games, New Clark City is now on the radar of investors. The same thing happened for the Sydney Olympic Park and the Newington district in Australia. Both have become thriving suburbs where people live and work. Property prices have increased in and around these suburbs. Best of all, these new districts decongested central Sydney. The same can happen for Clark, Cebu, and Davao, if they are named host cities.

Hosting the games puts the spotlight on our athletes. As we witnessed in the 30th SEA Games, our athletes were given the state support they needed to elevate their game and bring glory to the country. The same will happen in the years leading up to 2030.

Just as there are advantages, so are there risks in hosting the Asiad — the most glaring of which is having to spend billions on a new stadium that may be mothballed or rarely used after the games. This is what happened in Montreal, Beijing, and Athens.

Post-Game planning is essential to the overall success of hosting Olympic games. It’s important to consider how the sports facilities will be used after the influx of visitors leaves the city. In the case of London and Sydney, both purposely built their stadiums of medium size so as to be applicable for smaller-scale sporting events and concerts afterwards. During the opening and closing ceremonies of the games, they simply augmented their arenas with modular rafters to increase capacities.

In Los Angeles, they wisely decided not to build new structures, instead opting to modify their existing arena for the 1984 Summer Games.

Another risk is the inability to recover the billions of dollars invested to mount the games. Jakarta spent $3.2 billion to mount the 2018 Asiad while Incheon spent $2.05 billion in 2014. If ever, Manila will spend $5 billion 10 years from now. As mentioned earlier, good planning will enable the host country to recover the cost on the Olympic week itself, just as Los Angeles and London did. Also, media rights sales will play an even more important role in this digital age.

In evaluating the cost-effectiveness of hosting the Asiad, one must consider not only the revenues generated during the games alone — one must also compare the increase in the host city’s revenues after the games versus not hosting the games at all. The economic multiplier effect of hosting the games could last for decades.

But then again, financial profits are not the only determinant of success. The bigger consideration is the unquantifiable benefits on the country’s image and soft power.

I consider the decision to bid for the 2030 Asian Games a positive development. It is a potential game changer that civil society should support.

 

Andrew J. Masigan is an economist.

Launch of fully electric Taycan heads Porsche’s milestones in 2019

PORSCHE in 2019 began a new chapter in its history by simultaneously introducing in three continents the Taycan — the world’s first fully electric premium sports car to go into volume production. This year, the first batch of Taycan models are set to arrive in markets across the globe, included among which is the Philippines.

Besides launching the revolutionary Taycan, Porsche last year also achieved numerous other milestones. Here is a look back to some of these:

JANUARY
Three years after the premiere of the first Cayman GT4 Clubsport, Porsche unveiled its successor — the new 718 Cayman GT4 Clubsport. The model is a further development and came in a “Trackday” version meant for enthusiast racers, and “Competition” variant designed for national and international motor racing.

FEBRUARY
The Porsche Museum celebrated the 50th anniversary of the Porsche 917 by unveiling plans to restore the first 917 ever made to its original condition. Considered as one of the most successful racecars in history, the 917 — particularly the 917-001 — underwent various changes over time.

MARCH
Porsche launched three new sports models at the 89th Geneva Motor Show. The highlight was the new 911 Cabriolet. Displayed alongside this was the 718 T in both Boxster and Cayman forms, as well as the updated Macan S.

APRIL
In front of a capacity 4,400-strong crowd in Stuttgart’s Porsche Arena, Czech star Petra Kvitova finally won the Porsche Tennis Grand Prix on her seventh attempt. In a high-class final, she defeated Anett Kontaveit 6-3, 7-6(2) to earn for herself a Porsche 911 Carrera 4S Cabriolet as the main prize.

MAY
Porsche put the open-top, two-seat 911 Speedster into production. Exactly 1,948 units have been manufactured by the end of 2019 at Porsche’s plant in Zuffenhausen.

JUNE
Porsche works drivers Michael Christensen and Kevin Estre won the drivers’ world crown in the FIA World Endurance Championship at the season finale at Le Mans. The Project 1 customer squad dominated the GTE-Am class and at the same time claimed the drivers’ and team championship titles in the series.

JULY
For the first time, Porsche added an electric sports car to its lineup at the legendary Goodwood Festival of Speed. The debut was part of the Porsche Triple Demo Run, in which the Taycan made three appearances on three continents in three weeks. At Goodwood, the prototype competed with Mark Webber behind the wheel.

AUGUST
Porsche continued to consistently focus on electromobility, with the Cayenne range following the Panamera series in featuring a plug-in hybrid as its new flagship model. Like all Porsche plug-in hybrids, the new top-spec Cayenne is also one of the sportiest vehicles in the premium segment.

SEPTEMBER
Porsche presented its first fully electric sports car, the Taycan, to the public with a spectacular world premiere. Shortly after this, Porsche opened the new Taycan factory which sets new standards in terms of energy efficiency and environmental friendliness for production facilities.

OCTOBER
Following the launch of the Taycan Turbo S and Taycan Turbo, the third version of the four-door sports car, the Taycan 4S, was introduced.

NOVEMBER
On its Formula E debut season, Porsche works driver Andre Lotterer scored a strong second-place finish in the ABB FIA Formula E Championship 2019/2020 season-opening race. This was an encouraging debut for Porsche in the fully electric race series.

DECEMBER
Designers from Porsche AG and Lucasfilm Ltd. joined forces to develop a fantasy starship that brings together the design DNA of the two brands. For over two months, the project team worked together at their respective design studios in Weissach and San Francisco to create initial ideas and drafts before finally coming up with a concrete concept. The fantasy starship, named Tri-Wing S91x Pegasus Starfighter, was presented as a detailed model at the film premiere of Star Wars: The Rise of Skywalker, in Los Angeles.

Peso may strengthen on US-China phase one deal

THE PESO may strengthen against the dollar this week on the back of better risk appetite as the market waits for the ceremonial signing of the phase one trade deal between the United States and China.

The local unit closed at P50.66 per dollar on Friday, shedding less than a centavo from its P50.651 finish on Thursday, according to data from the website of the Bankers’ Association of the Philippines.

Meanwhile, it appreciated by 43 centavos from its P51.09 per dollar close on Jan. 3.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort attributed the sideways trading to the market’s anticipation of the phase one trade deal between the world’s two biggest economies.

“The financial markets are now anticipating the scheduled signing of the phase one deal amid continued easing of US-Iran tensions,” Mr. Ricafort said in a text message.

Reuters reported that White House officials have said on Friday that the Chinese translation for the key document which is set to be signed on Jan. 15 is yet to be completed.

Meanwhile, White House economic adviser Lawrence Alan Kudlow said in an interview with Fox Business Network that the document “is virtually complete” and all the signing is “all on schedule.”

A vital part of the deal is Beijing’s pledge to buy an additional $200 billion worth of products from the US for the next two years, a part of which is some $40 billion worth of agricultural products a year. In return, Washington will reduce tariffs imposed to nearly $160- billion Chinese goods by about a half.

UnionBank of the Philippines Inc. Chief Economist Ruben Carlo O. Asuncion also attributed the peso’s strength to subsiding tensions between Tehran and Washington.

“Risk appetites have seemingly improved across all markets as Iran and the US signalled their step back from increasing tensions in the Mid[dle] East,” Mr. Asuncion said in a text message.

Earlier, US President Donald J. Trump said he found it unnecessary for the US to hit back after Iran attacked their troops in Iraq as a retaliatory move for the death of military commander Qassem Soleimani through a drone strike by the US.

Mr. Trump assured that no Americans were hurt and that there was no major damage to the missile launches of Iran that targeted their base in Iraq.

“The fact that we have this great military and equipment, however, does not mean we have to use it. We do not want to use it. American strength, both military and economic, is the best deterrent,” Mr. Trump said, as reported by Reuters.

On Saturday, Iranian officials admitted that they had mistakenly shot down a commercial Ukrainian plane which killed all 176 aboard after initially denying they caused it in the tense aftermath of Iranian missile strikes on US targets in Iraq.

“The Islamic Republic of Iran deeply regrets this disastrous mistake,” Iranian President Hassan Rouhani wrote on Twitter, promising those behind the incident would be prosecuted.

For this week, RCBC’s Mr. Ricafort believes the market will continue to anticipate the phase one deal.

“Major catalysts include the widely expected signing of the phase one US-China trade deal on Jan. 15 that may be among the biggest positive lead for the global financial markets, including the peso,” he said.

Meanwhile, UnionBank’s Mr. Asuncion said the market will be on the lookout for key local data.

“The market would be waiting for the release of GDP (gross domestic product) growth numbers for 2019 Q4, slated for Jan. 23,” he said.

The economy grew by 6.1% in the third quarter, bringing the average growth for the nine-month period to 5.8%. In order to hit the government’s minimum target of 6% for 2019, fourth-quarter growth should hit at least 6.7%.

For this week, Mr. Ricafort sees the local unit playing around P50.40-50.90 a dollar, while Mr. Asuncion gave a forecast range of P50.50-50.80. — L.W.T. Noble with Reuters

Japanese firm eyes coconut processing plant in Davao Oriental

JAPAN-BASED Green Power Development Corporation is considering Davao Oriental as site for a processing plant for whole coconuts, according to the provincial government. In a statement, it said Governor Nelson L. Dayanghirang met last Thursday with the company’s top executives led by Chief Executive Officer Gen Kimitsuka and Consultant Jose Dante Mara. Based on the its submitted proposal, the investment will also involve supplying coconut seedlings to farmers and buying the harvest from them. Mr. Dayanghirang assured support to the venture as the company sets meetings with municipal government officials as well as indigenous people communities as some of the planned farm areas and processing plant site will cover ancestral lands. Green Power Development is also eyeing the establishment of hydro- and solar-powered energy facilities to provide supply to the plant.

Honda extends holiday promos this January

HONDA CARS Philippines, Inc. (HCPI) is pleased to announce the extension of its holiday promo, Cheers for Deals. This caters to customers planning to purchase Honda vehicles this January. This month’s promo covers the City, BR-V, Brio, Civic and CR-V with the following cash discounts and all-in low down payment offers:

The City 1.5 VX Navi CVT, New BR-V 1.5 S CVT, and All-New Brio 1.2 S MT are all available through a 10% special all-in cash out with payment terms of 36 up to 60 months through BPI Family Savings Bank, RCBC, Security Bank Corp., China Bank Savings, and Bank of Commerce only.

The CR-V Touring Diesel 9AT and New Civic 1.8 S CVT are available through 15% or 20% low net cash out with payment terms of 36 up to 60 months through BPI Family Savings Bank, RCBC, Security Bank Corp., East West Banking Corp., PNB Savings Bank, Philippine Savings Bank, China Bank Savings, Bank of Commerce, Sterling Bank of Asia, Maybank Philippines Inc., BDO Unibank, Inc., United Coconut Planters Bank, and Robinsons Bank only.

Other financing promo option offers are the Free One Month Amortization, available for 60 months payment term only and the Low Monthly Amortization, available for 15% and 20% all-in down payment for 36 to 60 months payment term.

All these extended holiday offers include three-year LTO Registration and Chattel Mortgage. Free one-year Comprehensive Insurance with Acts of Nature is also available through select bank partners.

To learn more about the latest news and promos, visit your nearest Honda dealership, or Honda Cars Philippines, Inc.’s official website at www.hondaphil.com. Hurry, offers are available until Jan. 31, 2020 only.

JG Summit’s share price down after raising stake in PLDT

By Mark T. Amoguis Senior Researcher

THE recent purchase of PLDT, Inc. shares by Gokongwei-led JG Summit Holdings, Inc. made the latter one of the most actively traded stocks last week with investors deciding to take profits.

A total of 6.54 million JG Summit shares worth P518.74 million exchanged hands from Jan. 6 to 10, data from the Philippine Stock Exchange showed.

The stock was lower by six percent on a week-on-week basis to P77.05 apiece last Friday from its P82-per-share close on Jan. 3. Since the start of the year, the stock has fallen by 1.2%.

“[B]ased on the movement of the share price, some investors of JG Summit decided to take profit because there’s still uncertainty as to how PLDT will be able to adapt in an environment where the third telco will be coming in,” Rachelle C. Cruz, senior research analyst at AP Securities, Inc., said in a phone interview.

“Investors are curious on the rationale behind the additional investment… Additional investment of JG Summit could be a sign of confidence on PLDT,” she added.

For Regina Capital Development Corp. Senior Equity Analyst Rens V. Cruz II, news of JG Summit buying into PLDT benefitted the latter more than the former.

“PLDT was trading on a sideways consolidation prior, so when a good name started buying into it — on top of reinforcing the fact it is still a good dividend play — [it] enticed most investors to buy up the stock for the week,” he said in an e-mail interview.

Last Tuesday, the holding firm of the Gokongwei family disclosed to the bourse that it bought 7.05 million common shares — representing 3.26% — of PLDT through the purchase and conversion of American Depositary Receipts of the telco company.

As a result of the acquisition, JG Summit increased its stake in the telco to 11.23% from 7.96%.

These shares were priced at $19.70 apiece, totalling $138.83 million. The deal was paid in cash and settled on Jan. 6.

JG Summit considers said it considers the deal as a “valuable investment” given PLDT’s good history of dividend payments. The company also said that this transaction will not have any adverse effect on its financial condition.

To recall, PLDT acquired JG Summit’s controlling stake (51.55%) in Digital Telecommunications Philippines, Inc. (Digitel). In exchange for the Digitel stake, JG Summit got 12.9% of PLDT, comprising 27.7 million common shares.

In November that same year, JG Summit sold 5.81 million and 4.56 million PLDT shares to Metro Pacific Resources, Inc. — an affiliate of Hong Kong-based First Pacific Co. Ltd. — and NTT Docomo, Inc, respectively. Both companies are major shareholders of PLDT.

Aside from telecommunications, JG Summit has business interests in branded consumer foods; agro-industrial and commodity food products; real property development; hotels; banking and financial services; petrochemicals; air transportation; and power distribution.

As of the third quarter, JG Summit posted a 50.3% increase in its net income attributable to equity holders of the parent company. This, despite recording a 2.4% drop in its attributable net income in the July-September period.

For this week’s trading, AP Securities’ Ms. Cruz pegged JG Summit’s support levels at P76.65 and P75.90 and resistance at P83.

Meanwhile, Regina Capital’s Mr. Cruz gave JG Summit a “near-interim” support of P76.85, followed closely by a “stronger” support level of P76.33. Meanwhile, he placed the stock’s resistance at P82.

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

Soaring SUV sales keep carmakers on collision course with climate policy

FRANKFURT — Soaring demand for SUVs drove record sales for premium carmakers including BMW and Mercedes last year, leaving the industry on collision course with government efforts to tackle global warming despite big investments in electric vehicles.

BMW said on Friday deliveries by its main luxury brand rose 2% to a record 2,168,516 vehicles last year, thanks to a 21% jump in sales of its “X” branded sport-utility vehicles (SUV) which now make up 44% of the BMW brand’s global sales.

At Mercedes-Benz, the world’s best selling premium car brand, every third luxury car sold last year was an SUV.

Automakers across the world are investing billions in electric vehicles to try to meet tougher emissions regulations. But the jury is out on how many drivers will buy them.

“Consumer preferences for SUVs could offset the benefits from electric cars,” the International Energy Agency (IEA) warned in its November World Energy Outlook 2019 report.

The IEA said a doubling in market share had seen emissions from SUVs grow by nearly 0.55 gigatons of carbon dioxide (CO2) during the last decade to roughly 0.7 gigatons.

As a result, SUVs were the second-largest contributor to the increase in global CO2 emissions since 2010 after the power sector — ahead of heavy industry including iron and steel, cement, aluminium, as well as trucks and aviation, it said.

There are now more than 200 million SUVs around the world, up from about 35 million in 2010, accounting for 60% of the increase in the global car fleet since 2010, IEA data shows.

“If the popularity of SUVs continues to rise in line with recent trends, this could add another 2 million barrels per day to our projection for 2040 oil demand,” it said.

The German carmakers say their vehicles are among the most fuel efficient available, thanks to hybrid and other technologies, adding customers could also choose to buy smaller, more frugal cars instead of SUVs.

Both BMW and Mercedes-owner Daimler say they aim to achieve new sales records this year, and are preparing to launch fully electric SUVs — the BMW iX3 and Mercedes-Benz EQC — which they say shows a commitment to a cleaner future.

EFFICIENCY GAINS
While acknowledging the growing popularity of SUVs, Germany’s powerful VDA auto industry association said much of the demand was for more efficient models.

“Only just under 5% of SUVs are large luxury class vehicles. The market success of the SUV segment is mainly due to the model offensive in compact and medium-sized SUVs, with correspondingly lower fuel consumption,” VDA said on Thursday.

The newly registered SUVs of German group brands had reduced their CO2 emissions by 35% since 2008, it added.

European Union lawmakers agreed in December 2018 that automakers had to cut CO2 emissions from cars by 37.5% by 2030 from 2021 levels, in addition to a 40% cut between 2007 and 2021, or face fines.

Evercore ISI analysts say the average German auto fleet emission is still too high at around 124 grams per kilometer in Europe, compared with the average limit of 95 grams per kilometer for 2020.

“The current CO2 performance is simply not good enough and we continue to flag that carmakers run the risk of facing considerable fines if more is not done,” they said in a note.

Electric and hybrid vehicles made up only 3.9% of new European sales in the third quarter of 2019.

BMW plans to launch 25 hybrid and electric cars by 2023, with more than 12 models being fully electric versions.

By 2025, half of all its cars are expected to be hybrid or electric vehicles, it said.

Mercedes expects half of its sales to be hybrid or electric by 2030, with Europe reaching the 50% mark in 2025.

Peter Fuss, a partner at EY, said German carmakers pushed sales of higher-margin SUVs last year ahead of the introduction of the more stringent European clean air rules in 2020.

In the fourth quarter of 2019 there was an unusually large rise in commercial registrations in Germany, Italy and Britain compared with figures for private consumers, in a sign carmakers were pushing more polluting models into the market.

“We will not see the same growth rates in this segment as we did last year,” Fuss said.

Electric car registrations are expected to take off in mid 2020, he added.

But that will depend on drivers being prepared to buy them, and perhaps also on how cheaply manufacturers are prepared to sell them. — Reuters

Grain trader Cargill’s profits jump on rising global meat demand

CHICAGO/BENGALURU — Commodities trader Cargill Inc. [CARG.UL] on Tuesday posted a quarterly profit rise of more than 19%, as the animal nutrition and protein business unit tapped into rising global demand for meat untainted by the spread of African swine fever in Asia.

Cargill said it was prepared for the changing demand patterns and the shift in global protein flows caused by the disease that has killed up to half of China’s hog herd since August 2018 and pushed Chinese pork prices to record highs.

The global markets for pork, beef and chicken have been reshaped as China has been scouring the world for new sources of meat.

The largest privately held US company by revenue has seen both plant- and animal-based protein as crucial to its success in recent years. Cargill and other agricultural companies have been hit by a sour farm economy, adverse weather and the US-China trade war.

Those strains are still being felt. Cargill said some of its regional origination and processing businesses, particularly in North America, were hurt by trade uncertainty and weather disruptions.

Cargill said adjusted operating earnings rose to $1.02 billion in the second-quarter ended Nov. 30, from $853 million a year earlier.

Net earnings rose 61% to $1.19 billion from $741 million a year earlier.

Minnesota-based Cargill’s quarterly revenue rose 4% to $29.2 billion.

Dave MacLennan, chairman and chief executive officer, said Cargill’s financial performance also got a boost from ongoing restructuring, including the divestment of its malt business and financial subsidiary CarVal Investors.

Other global grain traders have also been trying to shed poor-performing assets and invest in businesses with the potential for higher profit margins, such as specialty ingredients or meat production.

Rival Archer Daniels Midland Co. sold its palm business in Brazil, as part of a portfolio overhaul — and announced on Tuesday that it has acquired a plant-based extracts company in Brazil called Yerbalatina Phytoactives.

Earlier this month, Bunge Ltd said ended its 13-year ownership interest in an Iowa ethanol plant, following industry struggles with thin margins and overproduction. And Louis Dreyfus Co (LDC) has overhauled its executive team and launched a cost-cutting plan. — Reuters

Filipino shoe brand Annie & Lori takes a step in British Vogue

Annie & Lori shoes next to an iPad showing the British Vogue page that focuses on the brand.

IT’S NOT every day that a Filipino brand makes it into the pages of British Vogue, but here we are, talking about Annie & Lori, a homegrown brand featured in this month’s issue, under the Designer Profile section.

BusinessWorld reached Faith Mijares, the brand’s head designer and founder about the international recognition. The shoes aren’t easy to ignore. They’re lightweight leather sandals that have been worn by Miss Universe Catriona Gray, as well as Filipina Victoria’s Secret model Kelsey Merritt. The brand takes inspiration from local design, such as the country’s native bakya (wooden clog) and indigenous fabrics.

“Knowing how our artisans, our sapateros (shoe makers) have poured passion into creating quality shoes, I believe that it is but important to recognise them by highlighting that we are a Filipino brand,” said Ms. Mijares. “I’ve always wanted to showcase to the world how great Filipino craftsmanship [can be].”

The brand was launched in 2015, and Ms. Mijares recounts how it started. “The brand started out as a personal project. When my grandparents passed away, I knew I had to channel my sentiments to something productive and creative. I named the brand after my grandparents, Annie and Lori, two special people in my life who inspired me to start the business,” she said. “Before Annie & Lori, I was at the peak of my corporate career in a multinational company.”

Speaking about how a young brand can get international attention quite quickly, she said, “It has always been a dream — to be recognized and get featured on an international publication but I did not expect it to happen so soon hence it felt surreal. But it definitely inspired me and the brand to continue creating more beautiful shoes for the Filipina and for more women in other parts of the world.”

By being produced locally, Annie & Lori can tick off a box when it comes to sustainable measures, but Mr. Mijares takes it a step further. “We are aware of the impact of the fashion industry on our environment, hence it is but inevitable for us to think of sustainable and eco-conscious initiatives.”

The brand is known for using leather, but has now offered an alternative in the form of vegetable-tanned leather (leather processed by using plant-derived compounds, instead of other potentially harmful chemicals). “The vegetable tanned leather is lovely, but among all the things you’ll love about it most is that it leaves a minimal carbon footprint because of the use of organic materials and the natural tanning process,” she said. “The vegetable tanned leather collection is our most eco-friendly collection to-date but we are committed to discovering and using more eco-friendly materials in the future.”

It used to be that Filipino designer, in seeking international attention, would have had to hide behind more cosmopolitan names and designs, but times have changed. Ms. Mijares said, “Filipino elements are beautiful to begin with — which we do hope that more Filipinos get to appreciate someday. Aside from its beauty, some Filipino elements are unique, intricate and above all made with love and passion. Mixed with our brand’s modern and minimalist designs, those things perhaps make it translatable and relatable to the rest of the world.”

“Ours is a craftsmanship that is at par or sometimes even better [than] other global brands. If we will just continue to highlight the elements that are all uniquely Filipino (and that definitely includes high quality), the global market is definitely willing to embrace and recognise it.”

The brand is available through https://annielori.com/. — Joseph L. Garcia

The assassination of Qasem Soleimani

Iranian Major General Qasem Soleimani, Commander of the Quds Force of the Islamic Revolutionary Guard Corps. and acknowledged second most powerful man to Iran’s Supreme Leader Ayatollah Ali Khamenei, was killed by a US Air Force MQ-9 Reaper drone over the Baghdad International Airport Road in Iraq on Jan. 3.

Would “killed” be the right word on Soleimani’s death certificate? Most news reports have used “assassinated” or “liquidated” to accent the reputation and position of the deceased, and to insinuate the obvious political nuances of his demise at the hands of persons of interest — more than that, of nations-of-interest.

“The Pentagon launched an airstrike Thursday night that killed a powerful Iranian military leader, Gen. Qasem Soleimani, at Baghdad’s international airport,” USA TODAY announced on Jan. 3. It quoted that “the Defense Department said it conducted the attack at President Donald Trump’s direction as a ‘defensive action’ against Soleimani, who it said was planning further attacks on American diplomats and service members.”

“He was a monster. And he’s no longer a monster. He’s dead,” Mr. Trump said on the BBC on Jan. 7. “He was planning a big attack and bad attack for us. I don’t think anyone can complain about it.” But many all around the world, and even in the US, were complaining against what Trump did, for its repercussions on global politics and stability, and for the expected heightened security risks due to possible retaliatory and counter-retaliatory actions of interrelated states, according to their respective vulnerabilities.

Over one million people in Iran were part of mourning processions for Soleiman, reportedly the biggest since the 1989 funeral of the founder of the Islamic Republic, Ayatollah Ruhollah Khomeini. At least 56 people were killed and 213 injured in a stampede during Soleimani’s burial at Kerman, according to the BBC on Jan. 7. In Iraq, 2,000 protested in Basra and Nassiriyah on Jan. 10, with slogans saying “Neither America nor Iran, our revolution is a young revolution,” a feature in the Middle East Eye said on Jan. 11.

Trump’s brazen offensive against Iran creates a further chilling global effect with death of Abu Mahdi al-Muhandis, deputy chairman of Iraq’s Popular Mobilization Forces (PMF) and commander of Kata’ib Hezbollah, alongside Qasem Soleimani. Al-Muhandis was with high-ranking Iraqi and Iranian military officers who were in Soleimani’s entourage as it arrived at the Baghdad International Airport that fateful day, and were under the open skies of the Baghdad highway when missiles pulverized them to almost indeterminable recognition.

The drone, which was probably launched from Al Udeid Air Base in Qatar, was controlled remotely by operators at the Creech Air Force Base, a United States Air Force (USAF) command and control facility in Clark County, Nevada according to Arab News on Jan 5. And the gory details of a brazen off-base attack of a state on another state from another state’s territory lead to a maze of questions and analyses on whether the US attack was legal under international laws. Iran sent a letter to the United Nations, calling it “[s]tate terrorism” and said it violated principles of international law, Reuters reported on Jan. 4.

The Charter of the United Nations generally prohibits the use of force against other states, if a country does not consent to it on its territory. The Government of Iraq did not grant a permission to the United States to target a military commander from another country on its soil. The Japan Times of Jan. 4 asked, “A question of laws: Was US killing of Iran’s Soleimani self-defense or assassination?” Some legal experts believe that a lack of consent from Iraq makes it difficult for the United States to justify the attack. In fact, a mutual agreement signed in 2008 prohibits the United States from launching attacks on other countries from Iraqi territory, the same Japan Times analysis sad.

Iraqi Prime Minister Adil Abdul-Mahdi publicly declared that the US attack was a “breach of the conditions for the presence of US forces in Iraq, (and) the liquidation of leading Iraqi figures or those from a brotherly country on Iraqi soil is a massive breach of sovereignty.” Abdul-Mahdi has asked the US to withdraw its troops and facilities from Iraq, the Associated Press reported on Jan. 10.

President Trump made a public statement, shown on CNN and other networks, on Jan. 4 saying he had authorized the strike because Soleimani was plotting “imminent and sinister attacks” on Americans. He added, “We took action last night to stop a war. We did not take action to start a war.” He also said that he did not seek a regime change in Iran. But he did not even consult or ask Congress before the Soleimani attack, some congressmen from both political parties, said.

On Jan. 6, House Speaker Nancy Pelosi announced plans to hold a vote within the week on limiting President Trump’s war powers concerning Iran. On Jan. 9, the US House of Representatives voted 224–194 to approve it.

“Think” opinion columnist David Mark thinks Pelosi “was reduced to complaining that the strike (on Iran) came without consulting Congress,” because “the episode has knocked out the media’s round-the-clock focus on his impending Senate charges of abuse of power and obstruction of Congress, and coverage for days and weeks ahead is likely to be consumed with the strike” (nbcnews.com, Jan. 5). As indeed it has.

But is inspiring worldwide fear over the possible escalation of war and terrorism the way for a democratic world leader to go, to save himself from impeachment and being ousted from his arrogant perch as top leader of the top country in the world?

Russia and China were blamed by the US for “blocking a resolution condemning the attack on Washington’s Baghdad embassy.” The Russian Ministry of Defense, reacted by announcing that “Russia has offered Iraq their S-400 air defense system to protect their airspace” (almasdarnews.com, Jan. 7, retrieved from Wikipedia). On Jan. 6, Zhang Tao, the Chinese Ambassador, said to Iraq’s caretaker Prime Minister al-Mahdi that “China is keen to increase security and military cooperation in Iraq” (CNN, Jan. 6).

Even the ordinary man-in-the-street could not have avoided knowing about the assassination of Soleimani et. al, and some would have shrugged the news off as it might concern them only remotely, if at all. In these times of political strongmen leading powerful nations, some might even laugh and say, not quite pejoratively but maybe with concealed admiration, “Tarantado talaga yang si Trump!”

“Tarantado” is Filipino slang which means rough, reckless, impulsive, to achieve instant gratification from bullying and wrestling with anyone, and most everyone. “Tarantado” is more pejorative than “barumbado” which means being rough, reckless, an impulsive character, but usually not aggressive but reactive.

Reactive is what can be said of the Philippines’ announcement that the Department of Defense will send “two battalions of soldiers, in one C-130 plane and one C-295 plane, along with air and naval assets, to assist in the repatriation of 1,600 Filipino workers in Iraq and 1,000 Iran,” as reported by the Philippine Star on Jan. 8, and likewise publicly announced on other media.

Cannot the Philippines just let the Philippine Overseas Employment Administration, with the help of the Departments of Foreign Affairs and Social Services work out the repatriation of OFWs wanting to return home from Iraq and Iran? Using commercial flights for so few (since many do not want to come home) will be cheaper and speedier, instead of the reported 22 days needed to mobilize the Armed Forces. Besides, why are our leaders salivating to participate as a “saling-pusa” (like a voluntary little-child participant in the big boys’ war)?

Barumbado lang ba talaga ang Pinoy? (Is the Filipino just foolhardy?).

 

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Hong Kong’s first digital bank offers 6% deposit rate that dwarfs HSBC’s

THE FIRST OF Hong Kong’s new generation of digital banks has announced its arrival with a 6% introductory rate for deposits.

ZA Bank Ltd., one of eight firms preparing to start digital-only banks in Hong Kong, has begun a trial run that pays a select group of depositors over 3 percentage points more than banks such as HSBC Holdings Plc and Standard Chartered Plc. Though many doubt the new banks well be able to maintain such rates, the offer is a warning of upcoming competition for the city’s $410-billion local currency time-deposit business.

“This is more of a gimmick, which shouldn’t become a norm,” said Terry Siu, treasurer at CMB Wing Lung Bank Ltd., which pays 3.8% to new savers for two-month Hong Kong dollar deposits. “But competition for funds is indeed getting higher as eight more banks are coming out.”

ZA began a pilot last month for the city’s first digital-only bank. It’s offering the 6% rate for three-month Hong Kong dollar deposits capped at HK$200,000 ($25,000), according to a person with knowledge of the matter. The accounts are set at a 2% rate, but offer a top up of as much as 4% to select clients, the person said. Standard Chartered, HSBC and BOC Hong Kong Holdings Ltd. pay 1.9% to 2.3% for the maturity.

Groups of companies including Chinese giants Ant Financial and Tencent Holdings Ltd. were granted licenses to operate virtual banks last year by the Hong Kong Monetary Authority (HKMA). The launch is now approaching at a time when tensions stoked by pro-democracy protests in the former British colony show few signs of abating.

Deposit rates could stay elevated as the unrest persists amid concerns over money outflows. So far there haven’t been any signs cash is fleeing the city though banks have said some clients are inquiring about opening accounts elsewhere as a precaution. The Monetary Authority — the de facto central bank — steers the economy and maintains stability by pegging the city’s dollar to its US counterpart.

The rates stand in stark contrast to parts of the developed world, where central banks have slashed key rates below zero, forcing banks in some cases to pass negative rates onto retail customers. In Denmark, where rates have been negative the longest, a bevy of banks now charge depositors.

Deposit rates are also lower among other Internet banks globally. Monzo in the UK offers deposits of about 1.3%, while Australia’s uniquely named 86400 pays 2.25% on some deposits. In the US, Ally boasts of accounts with a 1.6% rate and three-month CDs at 0.75%, while Goldman Sachs Group, Inc.’s Marcus venture offers a savings account with a 1.7% rate.

A spokeswoman for ZA, a unit of ZhongAn Technologies International Group Ltd., declined to comment on the rate, but said that it will roll out new offerings in stages. ZA has said it will provide users with a “full suite of services 24/7,” allowing customers to open an account in five minutes with just a Hong Kong identity card.

An HKMA spokeswoman said in a comment to Bloomberg on Friday that it “notes” that some banks may offer “promotional” rates to some customers, while emphasizing that banking products are commercial decisions.

“While the Monetary Authority will not interfere with the commercial decisions of individual institutions, it would be a concern if a virtual bank planned to aggressively build market share at the expense of recording substantial losses in the initial years of operation without any credible plan for profitability in the medium term,” she said.

Virtual banks are similar to traditional retail banking services in that they will be able to accept deposits and give out loans. But they aren’t expected to set up physical branches, which will keep costs down.

Bloomberg Intelligence anticipates the new banks will find it difficult to make inroads into the city’s loan market, grabbing just a 1.5% share by 2025, since they will be held back by challenges in attracting deposits and high costs for interbank funding.

Alan Yip, a senior foreign-exchange strategist at Bank of East Asia Ltd., is also skeptical about the fat rate being offered by ZA becoming a trend.

“Traditional banks are only taking a wait-and-see approach now as the virtual banking business has yet to make a splash,” he said. “The market impact shouldn’t be very significant yet as they will need time to develop, therefore, the higher rate may not become a trend soon.”

Nevertheless, competition is heating up for a rich vein of the financial hub’s banking industry. Goldman Sachs estimated in 2018 that $15 billion, or 30% of the city’s total banking revenue, is up for grabs. — Bloomberg

Shares to rise on signing of US-China trade deal

By Denise A. Valdez
Reporter

THE MAIN INDEX is seen to be buoyed by global events in the coming week as eyes are focused on the scheduled signing of the Sino-US trade deal on Wednesday.

The 30-member Philippine Stock Exchange index (PSEi) ended last week’s trading lower by 20.87 points or 0.26% at 7,776.77 on Friday. On a weekly basis, the PSEi was down 80% amid its hot-and-cold performance during the first full week of trading for 2019.

Average value turnover last week inched up to P5.6 billion from P5 billion in the week prior, as foreign selling increased to P624 million from P505 million.

Online brokerage 2TradeAsia.com said the local market’s performance is a reflection of last week’s headlines, which was filled with news on the US-Iran tension overseas, and back home, on the signing of the national budget and data showing that headline inflation averaged at 2.5% last year.

“Local shares fell, pulled by geopolitical tensions in the Middle East following a US air strike that led to the death of Iran’s top military official, and a subsequent retaliation from Iran. Losses were trimmed, however, on President Duterte’s approval of the 2020 budget, plus 2019 inflation of 2.5% printing within BSP’s (the Bangko Sentral ng Pilipinas) target,” it said in a market note.

Heading into this week, the brokerage said one of the biggest catalysts will be the signing of the phase one trade deal between US and China in Washington on Jan. 15.

“2020 fired off with an emotional first full week of trading (albeit with forgettable turnout), with interest likely to spillover [this] week (US-China trade deal phase one signing + timetable for phase two),” 2TradeAsia.com said.

“Monitor turnover buildup on fundamentally well-revered stocks, as (fourth quarter) earnings reporting season nears, historically opening early February,” it added.

It also noted there is a “mispricing” in the market at present, as the country’s economy is supposedly projected to grow yet it does not translate to the PSEi’s performance.

Referring to the P4.1-trillion 2020 budget and the 6.5-7.5% gross domestic product growth forecast of the government, 2TradeAsia.com said: “An amalgamation of these will likely bring the local economy to historically unprecedented levels — and yet the PSEi trades at a mere 14x forward PE (price–to-earnings ratio), versus its 10-year average of 18x, and five-year average of 19x.”

“This is mispricing — at least to mean reversion advocates and/or seasoned players that can stomach and wait,” it added.

Considering all things, the brokerage said it expects immediate support for the week at 7,600-7,700 and resistance at 7,900.

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