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Gov’t sets second round of mining audit

By Reicelene Joy N. Ignacio
Reporter

THE GOVERNMENT will start towards the end of this month the second round of its audit of the mining industry in order to ensure operations do not harm the environment and benefit host communities, the Finance department said on Monday, adding that it expects the review “to be completed by January next year.”

The department’s press statement quoted Finance Undersecretary Bayani H. Agabin as saying that this round will cover 17 mining operations nationwide and will be conducted by the same technical teams that undertook the first round of reviews last year that covered 27 mines.

The department issued the announcement as head of the Mining Industry Coordinating Council (MICC), which it co-chairs with the Department of Environment and Natural Resources (DENR).

The MICC also consists of the Department of Justice, the National Commission on Indigenous Peoples and the Union of Local Authorities of the Philippines.

“The MICC will complete the review and management teams in the second and third weeks of July. We will tap around 15 experts from the same technical teams that did the first audit,” Mr. Agabin said in the press release, explaining that the experts will be grouped into three teams with five members each.

He added that the review will cover the environmental, economic, social, legal and technical aspects of mining operations.

Sought for comment, Chamber of Mines of the Philippines (CoMP) Chairman Gerard H. Brimo, chairman and chief executive officer of Nickel Asia Corp., said in a mobile phone message that “audits by MICC are always welcome.”

“They’ve been done well — thoroughly and fairly — and when they’re done in this manner, the industry has no reason to object.”

CoMP Executive Director Ronald S. Recidoro said, “ We are hopeful that these companies, many of them members of the chamber of mines, will again pass scrutiny by government regulators.”

“We also hope that, with the completion of the audits by January 2020, government will have finally resolved the major issues confronting the mining industry — legal, technical, social and environmental — and formulated a comprehensive policy to move it forward,” he added.

The first audit resulted in 23 cleared to continue operations after being found compliant with environmental and other state regulations. Four mines did not pass that first review round and were recommended for closure, although they were allowed to appeal the decision with the Office of the President.

The industry’s review is being undertaken pursuant to Executive Order No. 79, issued in June 2012, which imposed a moratorium on new mining permits “until a legislation rationalizing existing revenue-sharing schemes and mechanisms shall have taken effect.”

Republic Act No. 10963, an encompassing tax reform package that slashed personal income tax rates but increased or added levies on several goods and services when it went into effect in January last year, doubled the excise tax on mineral products to four percent.

The Finance department had clarified, however, that the provision did not satisfy EO 79’s requirement for the lifting of the moratorium on new permits, since an overhaul of the mining industry’s fiscal regime should also cover royalty, windfall profit and other taxes and fees, as well as incentives.

Hence, the MICC deferred a decision to lift the moratorium until a new industry fiscal scheme is in place.

In a text message, Mines and Geosciences Bureau (MGB) Director Wilfredo G. Moncano, said, “MGB has recommended to the MICC, co-chaired by (Finance) Sec(retary Carlos G.) Dominguez (III) and (Environment) Sec. (Roy A.) Cimatu the lifting of the moratorium on processing of MPSA (Mineral Production Sharing Agreement) applications so that we can have new mines opened and operating.”

“However, we may have to wait until a new fiscal regime other than the doubling of taxes is passed by Congress…”

Mining has been in the doldrums since EO 79 was issued in mid 2012, although experts abroad have noted that the Philippines has substantial mineral deposits to keep foreign miners interested in the country.

METALLIC MINERAL OUTPUT
MGB data as of May 30 show metallic mineral production growing in value by 11.57% to P27.466 billion in the first quarter from P24.618 billion a year ago.

The same comparative periods saw gold production increasing by 12% in volume to 5,651 kilograms (kg) from 5,034 kg and by 10% in value to P12.225 billion from P11.107 billion.

Silver increased by 11% in volume to 8,469 kg from 7,613 kg and by three percent in value to P217.292 million from P210.342 million.

Copper concentrate grew in volume to 81,059 dry metric tons (DMT) from 69,839 DMT, but slipped by three percent in value to P5.059 billion from P5.202 billion.

Mixed nickel-cobalt sulfide output rose in volume by four percent to 22,270 DMT from 21,394 DMT, while value surged 35% to P7.102 billion from P5.274 billion.

Finally, production of nickel direct shipping ore grew volume by three percent to 2.969 million DMT from 2.895 million DMT, while value roughly steadied at P2.769 billion from P2.758 billion.

Mining contributed about 0.66% to gross domestic product (GDP) in this year’s first three months, roughly steady since at least 2016.

Taxes, fees and royalties from the industry have been on a steady decline from P35.494 billion in 2016 to P25.691 billion in 2017 and to P11.733 billion last year. Levies totaled some P268.8 million in the first quarter.

“We wanted to increase mining industry’s contribution to… GDP… from the current 0.7% to 4-5%,” Mr. Moncano said.

“This can be done by opening four new major mines as soon as possible and data from small-scale mining are captured.” — with Reuters

Senate chief seeks to hike state’s take from miners

By Charmaine A. Tadalan
Reporter

A MEASURE increasing the government’s take from mining revenues, which forms part of the Duterte administration’s comprehensive tax reform program, has been filed anew in the Senate.

Under Senate Bill No. 240, Senate President Vicente C. Sotto III proposed to impose royalty on miners operating outside mineral reservations, which is currently levied only on firms located inside such sites.

“There is a need to amend the existing mining fiscal regime and further enhance equitable share of the government in the utilization of natural resources,” the Senate President said in the explanatory note of the bill, dated July 8.

Mr. Sotto adopted the version, proposed by the Department of Finance in the 17th Congress, which sought to retain the royalty at five percent of the gross output of the minerals/mineral products extracted, currently imposed only on firms in mineral reservations.

The bill also introduces royalty on firms outside such reservations which will be phased in from three percent in the first three years of implementation, four percent in the fourth year and five percent from the fifth year onward.

This will be levied on top of other taxes, such as the corporate income tax, excise tax which Republic Act No. 10963 doubled to four percent, royalty to host indigenous communities and local business tax, among others.

The bill defined gross output as the “actual market value of minerals or mineral products from each mine or mineral land operated as a separate entity, without any deduction for mining, processing, refining, transporting, handling, marketing or any other expenses.”

Moreover, Mr. Sotto proposed an additional government share, equivalent to the difference between the 50% of net mining revenue (gross output less deductible expenses) and the basic government share consisting of direct taxes and royalty. “Royalty is imposed to compensate the state for the utilization of natural resources by mining contractors, while the proposed additional government share becomes due when prices and profits are high,” he explained.

The government currently gets additional share from mining contractors under a Financial Technical Assistance Agreement, which applies to large-scale operations.

Mr. Sotto’s proposal also seeks to prevent excessive debt by disallowing deduction of interest expense when a company records a debt-to-equity ratio in excess of 1.5 to one.

A bill overhauling miners’ fiscal regime nearly made it out of the recently concluded 17th Congress after the Senate Ways and Means committee adopted the House of Representatives’ version with minor amendments. But it failed to bag second and third reading approval before the June 3 adjournment.

The previous version proposed to reduce the royalty on large-scale mining in reservations to three percent of gross output from five percent currently and introduce a 1-5% margin-based royalty on those outside mineral reserves. The Senate, however, excluded non-metallic mining operations from the coverage.

Sought for comment, Finance Assistant Secretary Ma. Teresa S. Habitan said in a mobile phone message on Tuesday: “We would like to take a look at the bill first, although it is favorable that royalty will cover all mining areas, whether in or outside mineral reservations.”

Corporate regulator issues rules for small business crowdfunding

START-UPS and micro, small and medium enterprises (MSMEs) may now raise up to P50 million through crowdfunding following the Securities and Exchange Commission (SEC)’s release of guidelines regulating this method of fund raising.

In a statement on Tuesday, the corporate regulator said it approved the Rules and Regulations Governing Crowdfunding (CF Rules) during its July 4 en banc meeting.

“With the rules and regulations governing crowdfunding in place, the commission hopes to support recent financial innovations on providing easier access to finance — especially for smaller business start-ups or ventures — while ensuring the integrity and fairness of financial systems and the protection of investors,” SEC Chairman Emilio B. Aquino said in a statement.

The rules, published on the SEC Web site, define crowdfunding as the “offer or sale of securities of a limited scale usually for start-ups, MSMEs done through an online electronic platform.”

Such transaction involves three parties: the entrepreneur or project initiator, supporters or those willing to fund the entrepreneur’s business idea or project, and the platform or moderating organization that helps the entrepreneur and supporters realize the business idea or project.

The SEC identified four types of crowdfunding, namely: donation-based, reward-based, lending-based, and equity-based. The rules, cover only the latter two, since they involve offers of securities or shares to the public.

Start-ups and MSMEs may raise up to P10 million through CF when the amount is offered to retail investors, and may reach up to P50 million when it is offered to banks, registered investment houses and insurance companies, among others.

Meanwhile, a retail investor with annual income of up to P2 million may invest a maximum value of five percent of total income per year. Those with an annual income of more than P2 million may invest up to 10%.

No limit is set for the bigger investors.

Investors must also be provided with relevant information on the issuer’s CF activities, such as fees, charges and other expenses, as well as information on investor rights.

Recognizing that some entities have already been conducting crowdfunding, the SEC has set a three-month transition phase to give them time to comply with the new rules.

They may continue their existing operations until the SEC decides on their registration application with the commission.

“Otherwise, those who fail to submit an application during this transition phase will be regarded as carrying on crowdfunding activities in violation of SEC rules and regulations and will be penalized accordingly,” according to the rules. — Arra B. Francia

CCP turns Gold: Festivities start in September

By Susan Claire Agbayani

TEN years ago, as the Cultural Center of the Philippines (CCP) was preparing for the celebration of its 40th year, then CCP President Nestor Jardin approached former First Lady Imelda Marcos at the CCP ramp and asked her, “Where did you bury the time capsule?”

“D’yan (there),” Mrs. Marcos said, pointing to the front lawn. But she couldn’t remember exactly where. “It was impossible for us to start digging the whole front lawn. We’ve lost it, unfortunately,” Mr. Jardin (now a member of the CCP’s Board of Trustees, he is, in his own words, “The longest, continuously serving official of the Cultural Center,” having been directly or indirectly involved with CCP over the last 46 years, starting as an apprentice and scholar of Ballet Philippines in 1973) told reporters during a press conference announcing the celebration of the CCP’s 50th anniversary.

Mr. Jardin said that buried with the time capsule were “Scores of some of our National Artists, dance notes from Francisca Reyes Aquino, sketches from one of the very precious, priceless works.”

Luckily, this will not be the case today thanks to advances in technology.

During the press conference, current Vice-President and Artistic Director Chris Millado announced, “We are launching the digital time capsule project, which is a participative, interactive way of involving our publics who have shared memories of the CCP, to contribute photographs, videos and a profoundly larger number of mementoes [which will] be digitized, and archived, in a time capsule. Everyone is enjoined to contribute to it.”

CHANGES IN 50 YEARS
Mr. Jardin recalls that at the time he joined the CCP, it “was merely a performing arts venue; it did not undertake many programs.”

He is gratified that “50 years hence, the CCP has transformed itself into a purposeful and important arts and cultural institution in the country. And now, we celebrate all the outstanding and wonderful productions that were created and conceptualized in this theater.”

He wants to celebrate the outstanding artists — both local and foreign — who have graced its halls: prima ballerina Margot Fonteyn, pianists Van Cliburn and Cecil Licad, singer-actress Leah Salonga, and the Royal Shakespeare Company, to name a few.

Mr. Millado noted that the first “17 years (of the CCP) were the founding energies, efforts, breakthroughs of the tandem of the founder, Ms. Imelda Marcos and our beloved Lurecia Kasilag. Thirty-three years after, (it) was a series of artistic leaders, cultural managers, and administrators who, with their own expertise and contributions to what we now know as CCP, that brought it to a sort of rebirth: reborn in people’s cultural expressions; reborn in a whole milieu that recognized and embraced not only the culture of Manila, and what was then known as international artists, but the culture of the greater archipelago, including several endeavours.”

“I’m proud of the fact that the CCP has been instrumental in promoting Philippine arts and Filipino artists all over the world. That thousands and thousands of artists, young artists, cultural workers, teachers have been trained by CCP, not only here, but all over the country; and that our Outreach Program (initiated in the 1970s) has reached the hinterlands in many regions of the Philippines,” Mr. Jardin said.

STARTS IN SEPTEMBER
The year-long celebration will kick off this September. “We will have the anniversary gala,” said Mr. Millado. “We will have the formal version, which will be an opportunity for fund-raising; and the People’s gala, which will be open to the public at popular ticket prices.”

That month will also see the unveiling of Ginintuang Sining (Golden Art), a large-scale life and sound installation at the CCP’s façade. “It’s a wonderful collaboration between installation visual artist Toym Imao and Arwin Liwag who represents the whole family and clan of lantern makers in Pampanga,” said Mr. Millado. The collaboration will “tell the story of the CCP’s contribution to excellence nurturing Filipino aesthetics, and nurturing the next generation of artists.”

To be inaugurated in October is the Tanghalang Ignacio Gimenez — also called the Blackbox Theater — a new, multi-purpose space “for artists to develop, showcase, and further refine their works,” said Mr. Millado. He added that the new theater’s acoustics were done by one of the best acoustic designers of the world. Part of the new theater’s design will eventually merge with the new facility, the New Performing Arts Center.

The CCP will also host the Manila International Performing Arts Summit (MIPAS), “a multi-platform event that will train a spotlight on our performing arts content creators in the field of Music, Dance, Theater, Multi-media, Experimental, Spoken Word,” among others.

MIPAS includes the Conference and Federation of Asian Cultural Promoters, which will bring promoters from all over the US, Europe, and Asia looking into Asian content to bring to international festivals; the MIPA Market which will have booths, pitching sessions, B2B meetings, and networking sessions for traditional, regional, professional groups and international arts markets; and, the Conference of the Association of Asia Pacific Performing Arts Centers, an association of executives who manage major art houses and venues in the region who will talk about the changing role of art institutions in relation to the academe, emerging technology, audience development, and philanthropy.

The CCP will also bring together thought leaders, teachers, artists, legislators, and LGUs to talk about arts education and how important it is for the development of national life via the forum “Imagine Nation.”

Meanwhile, after selling the latest edition of the Encyclopedia of Philippine Art at P50,000 for a set of 12 volumes, and giving it “completely free to all public schools, universities and colleges,” the CCP will now make the Encyclopedia of Philippine Art available online at “Spotify price levels,” said Mr. Millado.

Other things to watch out for throughout the year-long festival:

• The First Arts and Social Media Festival which will bring together bloggers, social media influencers, and professional public relations specialists for mentoring the next generation of Arts advocates;

• SiningKwenta, a series of selected shows with tickets at only P50;

• CCPLibre: 50 shows at P50;

• The expansion of key festivals, tour of shows and resident groups to cities and municipalities nationwide; and

• Anniversary publications including a photographic almanac, coffee table books, and a magazine about the history and contribution of the CCP.

Mr. Jardin’s wish list for CCP’s 50th year: “The completion of the CCP Complex Development Plan; and for CCP to be financially self-sufficient, and free from political interventions.”

Petron puts Philippine expansion plans on hold

PETRON Corp. is putting its expansion plans in the Philippines on the back burner, as it waits for global crude oil prices to stabilize.

The listed oil refiner earlier said it is spending $1 billion to upgrade its refinery and expand its retail network over the next three years. About $600 million of this spending was allotted for its refinery expansion in Limay, Bataan.

“Ang negosyo ng Petron sumasama dahil ang world prices ng crude oil, fluctuation, ang laki (Petron’s business is getting worse because the fluctuation in crude oil prices is getting bigger),” Petron President and Chief Executive Officer Ramon S. Ang told reporters after the stockholders’ meeting of another company he leads in Mandaluyong on Tuesday.

Mr. Ang cited the large fluctuations in world prices in crude oil currently affecting the industry, as well as lower prices among independent players. He said that smaller players, or what he called white stations, now account for 37% of total industry volume.

The top official answered in the affirmative when asked whether smuggling has become rampant in the country, noting that this was caused by the implementation of excise taxes on fuel products.

Mr. Ang said excise taxes have doubled to P12 since the implementation of the Tax Reform for Acceleration and Inclusion law in 2018, prompting the proliferation of oil smugglers in the country.

“The game plan is to concentrate more on other businesses,” Mr. Ang said.

With this, Petron expects minimal growth in earnings for the year at about P8-9 billion, compared to its P7.1-billion net income in 2018 — which was already 50% lower than the P14 billion it generated in 2017.

“With this fluctuation (in oil prices), maswerte na (we will be lucky) to get P8-9 billion. Karamihan magdadala nun Malaysia pa (Mostly because of Malaysia),” Mr. Ang said, adding that Malaysia accounts for 40% of the business.

Petron’s net income dropped 78% to P1.3 billion in the first quarter of 2019, following a four percent decline in consolidated revenues to P124.6 billion. This came after a five percent drop in sales volume due to the implementation of TRAIN.

The company tallied an increase of around P8 billion in excise taxes and P1 billion in value-added taxes on a quarterly basis for the January to March period.

Petron currently has more than 3,000 stations, more than 650 of which are in Malaysia. It looks to have 6,000 stations under its portfolio by 2022.

It recently raised P20 billion from the issuance of preferred shares.

Shares in Petron were unchanged at P5.90 each at the stock exchange on Tuesday. — Arra B. Francia

Rembrandt’s The Night Watch begins on-site restoration

AMSTERDAM — Rembrandt’s 17th century masterpiece The Night Watch begins restoration work on Monday in Amsterdam where visitors will be able to watch every step of the Rijksmuseum’s biggest ever project.

The €3 million ($3.4 million) effort is expected to take about a year, museum director Taco Dibbits said.

That is due not only to the fame of the painting, which dates from 1642, but also to its size, as the canvas measures 3.63 by 4.37 meters (11.9 feet x 14.3 feet) and weighs 337 kg (742 pounds).

The painting will remain in its usual spot at the end of the Gallery of Honor in the Rijksmuseum and visitors will be able to watch from behind a glass wall as experts restore it.

Painted over several years, The Night Watch was commissioned as a group portrait of an Amsterdam city militia and broke new ground by showing its subjects in action rather than as a static portrait.

Experts argue over whether it was intended as a night scene or whether it is simply perceived as such because of Rembrandt’s use of shadows pierced by light.

Restorers will begin by taking thousands of high-resolution photos of the work from every angle and scanning it with lasers.

“Those you have to stitch together so you get one image and then we will be able to see which changes Rembrandt made” as he worked, Dibbits said.

Restorers want to learn “which pigments were used, so which paint he basically used, and also how we can treat it.”

The painting was most recently restored after a man attacked it with a knife in 1975. — Reuters

Razon’s firm stopped from taking over PECO assets

A MANDALUYONG court has declared sections of the law that granted Razon-led MORE Electric and Power Corp. a franchise as a distribution utility in Iloilo City as void and unconstitutional for infringing on the right of the area’s existing electricity distributor Panay Electric Co., Inc. (PECO) to due process and equal protection of the law.

“Wherefore, premises considered, judgment is hereby rendered declaring Sections 10 and 17 of RA No. 11212 void and unconstitutional for infringing on PECO’s rights to due process and equal protection of the law,” reads the dispositive portion of the judgment made by Monique A. Quisumbing-Ignacio, presiding judge of Branch 209 of the Mandaluyong City Regional Trial Court (RTC).

Republic Act No. 11212 was signed into law on Feb. 14, 2019, granting MORE a franchise to establish, operate and maintain a distribution system in the city of Iloilo.

“Consequently, PECO has no obligation to sell and respondent has no right to expropriate PECO’s assets under Sections 10 and 17 of RA No. 11212; and, PECO’s rights to its properties are protected against arbitrary and confiscatory taking under the relevant portions of Sections 10 and 17 of RA No. 11212,” the court order stated.

Section 10 authorizes MORE to exercise the power of eminent domain and acquire such private property as is actually necessary for the realization of the purpose for which the franchise is granted.

Section 17 states the power of MORE, as grantee, to effectively acquire power distribution assets. The distribution assets that exist within the franchise area could only refer to those of PECO.

The case was filed by PECO against defendants MORE, Department of Energy, Energy Regulatory Commission and all other agencies tasked to implement RA No. 11212.

The court also made permanent the temporary restraining order dated March 14, 2019 enjoining respondent MORE and/or any of its representatives from enforcing, implementing and exercising any of the rights and obligations set forth under RA 11212.

The rights that had been blocked by the court include commencing or pursuing the expropriation proceedings against petitioner PECO under the assailed provisions; and takeover by respondent MORE of PECO’s distribution assets in the franchise area.

The court decision was dated July 1. It was distributed to reporters on Tuesday, July 9.

The presiding judge said that in a long line of cases, the Supreme Court has defined “the power of eminent domain” as the power of the State to acquire private property for some public purpose.

“Although the power partakes of a sovereign character, it is by no means absolute,” the judge said.

For a valid exercise of the right of eminent domain, it is necessary that the property sought to be taken is not being devoted to the particular public use contemplated by the expropriation body, the decision read.

It stated that the power of eminent domain was never intended to be used as a tool to take private property already being devoted to public use from one person and transfer the same to another to be used for the same purpose.

“It does not achieve the ultimate end of eminent domain which, to repeat, is to meet a public need or public exigency,” it added.

PECO’s properties are already being devoted to public use, that is, for power distribution, thus the only tangible effect of the exercise of eminent domain by virtue of the assailed provisions would be to replace PECO with MORE as the owner of the existing distribution system.

The court points out that what it is discussing as unconstitutional is the transfer of all of PECO’s distribution assets existing at the franchise area by virtue of the exercise of the right of eminent domain as provided for in the assailed provisions.

“The grant of the franchise is another matter which is not the issue in the present petition,” it says.

Sought for comment, MORE Power legal counsel Hector P. Teodosio said they will file an appeal either before the Court of Appeals or the Supreme Court.

At the same time, Mr. Tedosio said the decision of the Mandaluyong RTC has no serious effect on the expropriation case they filed before the RTC Branch 37 in Iloilo City to acquire PECO’s assets.

“There is no serious effect because ang (the) RTC of Iloilo City where the expropriation is filed, is an independent and co-equal court,” he said yesterday.

On the other hand, PECO Administrative Manager Marcelo U. Cacho, in a press conference on Tuesday, said they will continue the legal fight while giving assurance that their customers will be given utmost priority.

“The (Mandaluyong) RTC confirms that one cannot legislate the illegal takeover of a private company lock stock and barrel in the guise of expropriation. We know that this decision will not stop our adversary but we are committed to keep up the fight and defend our rights under the constitution. PECO reaffirms the commitment we have given time and time again never to abandon Iloilo City —even as we keep up the fight,” Mr. Cacho said.

He added that PECO will be refiling their franchise renewal application before the House of Representatives once the 18th Congress opens on July 22.

PECO was granted a 25-year franchise in 1968 by virtue of RA No. 5360. The franchise was extended by another 25 years in 1994. The company was the only operator in the power distribution history of Iloilo City. It filed an application for renewal on July 22, 2017 in anticipation of the expiration of its legislative franchise by January 2019. — Victor V. Saulon with a report from Emme Rose S. Santiagudo

Hot, cold and busted sales in London show the risks of flipping art

COMPETING bids for a tiny abstract painting by Robert Ryman climbed higher and higher until — Bang! — the hammer came down on the 1963 canvas at £850,000 ($1.08 million), more than twice its low estimate.

The boisterous moment came during the evening auction of contemporary art at Sotheby’s in London on June 26, but it masked a sobering reality: Untitled #32 was far from a great investment.

The 7.7-inch square canvas marked with thick white brushstrokes had been purchased for $1.09 million less than two years earlier. The anonymous owner tried selling it last summer, when it appeared in a New York show priced at $1.8 million. The work returned to the market in June estimated at £400,000 to £600,000. While that did the trick, the seller barely broke even. The S&P 500 Index gained 16% over the same period it was held.

The result underscores the risk of seeking quick gains in the opaque art trade. Every couple of seasons, market darlings emerge while erstwhile favorites are cast aside. Some investors have made a killing flipping works by hot young artists or guaranteeing blue-chip pieces. Inevitably, though, there are missteps.

Sotheby’s got a single bid for a painting of a carpet by Rudolf Stingel, which the seller purchased for $3 million just two years earlier at Christie’s in Hong Kong. It sold for about $1.3 million (before the fees charged by the auction house).

“A lot of these works are not fresh to market and the estimates are quite aggressive,” said Benjamin Godsill, a New York art adviser. It’s also gotten harder to flip from one auction to another as more buyers can look up results online, he said.

Those who bought works by emerging artists from galleries a few years ago had a much better time of it.

Christie’s in June had 19 registered bidders for Out of Body, a 2015 oil and fabric collage on canvas depicting curvaceous female figures in bright colors, by Tschabalala Self, an up-and-coming artist with rave reviews and museum exhibitions under her belt. Four years ago, Out of Body was priced at less than $10,000 in her first solo gallery show in New York.

On June 26, it fetched £371,250, more than six times the high estimate and a record for the 29-year-old artist. The buyer was Jose Mugrabi, the patriarch of a collecting family known for its holdings of Warhols and Basquiats as well as investment in emerging artists. In 2013, the Mugrabi family paid $389,000 for Lucien Smith’s first painting at auction. It remains the artist’s record, long after his auction prices collapsed.

On June 27, another Self painting, Leda, fetched £237,500 at Phillips, roughly a 2,000% increase from four years earlier and about four times the high estimate.

At Sotheby’s, a large portrait of a young black woman, Compound Leaf (2017), by Toyin Ojih Odutola went for £471,000, more than three times the high estimate and also a record at auction. It was purchased from Jack Shainman gallery in 2017 for $40,000.

Such rewards are far from common advisers warn.

“Any time you buy a work by an emerging artist, it’s more likely be worth the same amount or less in five years than $100,000,” Godsill said. — Bloomberg

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Kicking off the year’s conference is Charles Hayes, Partner & Executive Managing Director, Asia, IDEO who will speak about “From Operational Efficiency to Creative Competitiveness: a Human-centered view of technology in the 21st Century”. Charles sits on the global leadership team of IDEO, one of the world’s most respected companies in innovation and design thinking. Other confirmed speakers include Donald Lim, Chief Executive Officer, Dentsu Aegis Network, Philippines who will discuss “The Digital Transformation Imperative” and share his thoughts how transformation is being implemented in the Philippines market.

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Gardenia expands with new facility in Pampanga

By Vincent Mariel P. Galang, Reporter

GARDENIA Bakeries Philippines, Inc. is expecting stronger sales and volume growth this year, after it inaugurated its P2-billion bread manufacturing facility in Mabalacat City, Pampanga.

“Nationwide, we expect to grow by at least 25% (in volume and value), including Luzon with this factory. Because with Luzon, we’ve been here for 21 years, so we’ve been serving this market for quite some time but there are still areas that are not yet saturated so we are going to, susuyurin naming lahat ’yung [we will go to all] smaller markets,” Gardenia President Simplicio P. Umali, Jr. told reporters after the plant tour on Tuesday.

He mentioned Ifugao, Tabuk, and Mountain Province of the Cordillera Administrative Region (CAR) as areas where Gardenia will focus on increasing its presence.

The new facility can produce 400,000 loaves and buns a day, which Mr. Umali said will bring its total production to 1.8 million loaves and buns a day.

The new facility, which is Gardenia’s second largest after its Laguna plant, has production lines for white loaf, flavored loaf, bun and pandesal, and snack toast.

By the end of 2019, Mr. Umali said the company expects sales to reach P8 billion from about P7 billion in 2018.

“Profit-wise, in terms of profitability, it will still be very low because the margins that we are getting from bread are very low, but we expect to recover this over time… because you have to recover first the investment in the factories, and with this large investment… For us, any new factory takes about seven to eight years to recover the investment,” he added.

Gardenia is also targeting to increase the production of its low-priced brand NeuBake to 40% from 10%.

“As the market demand improves, we will expand. In fact, we intend to make that as much as 40% in the future because the low-income market is very large. We want to make this product available for them as a second brand,” Mr. Umali said.

“We think by next year, we could go to as much as 20%… probably in three years that could be 40%,” he explained.

NeuBake Bread is priced at about P40 per loaf, versus the Gardenia Classic White Bread priced at about P60 per loaf.

The Pampanga facility is the second fully automated bread plant that Gardenia has opened in the first half. It earlier inaugurated the bread manufacturing facility in Cagayan de Oro.

Mr. Umali said the company is planning further expansion, but declined to provide details.

Money flows into Asian equities on expectations of rate cuts, trade optimism

FOREIGN investors turned net buyers of Asian stocks in June as optimism ahead of a meeting between US President Donald Trump and his Chinese counterpart Xi Jinping, along with expectations of US interest rate cuts bolstered sentiment.

Overseas investors purchased a net $4.2 billion worth of equities in June, data from stock exchanges in South Korea, Taiwan, India, Thailand, Philippines, Indonesia, and Vietnam showed.

The leaders of the US and China agreed late last month to restart trade talks after Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing.

A collapse in trade talks had prompted sharp foreign outflows from Asian equities in May.

“The US-China trade truce at the G20 meeting will likely support further inflows over the weeks ahead but this will have to be balanced against the impact of slowing growth and elevated equity valuations in some countries (India, Indonesia),” noted Mitul Kotecha, a senior emerging markets strategist at TD Securities.

“On balance, we expect portfolio inflows to Asia to continue to strengthen but to remain discriminatory.”

In June, Thai equities attracted $1.5 billion worth of foreign money as the country’s political uncertainty ended after General Prayuth Chan-ocha secured a needed majority in the parliament.

Sino-US trade optimism helped Taiwan and South Korea to secure higher inflows last month, as the two countries have extensive ties with tech companies in China and are part of their supply chains.

However, India received just $374 million worth of inflows, the lowest in five months, as concerns over sluggish consumption and slowing growth overtook last month’s national election euphoria.

So far in July, foreign investors have sold a net $451 million in Indian equities. In its annual budget on Friday, the government proposed to increase listed companies’ minimum public shareholding and raise the income tax surcharge on foreign portfolio investors.

June inflows into Asia was also helped by expectations that the US Federal Reserve would aggressively cut interest rates soon to boost the economy.

However, a recent rebound in US job growth has reduced the likelihood the Fed will slash rates at its next meeting later this month, pressuring equity markets globally.

“The Trump-Xi meeting did indeed result in another trade truce, and both sides have restarted trade talks. But a deal could still be some time away, and is far from a guarantee,” noted Khoon Goh, head of Asia research at ANZ Research.

“A rate cut at the next FOMC meeting at the end of July is also far from a done deal given the still strong state of the US labor market.” — Reuters

A new mural on marine life decorates the Paseo underpass

IT WAS late one evening when a young woman, along with two friends, was walking through the Paseo de Roxas underpass in Makati on her way home after a long day at work. Mural artist A.G. Saño was painting at the steps of the underpass when she recognized him. She happened to have been a participant at his art and environmental engagement talks at a university in Camarines Sur, Bicol some years before. He then asked the woman and her friends if they were interested in helping him paint the mural. Mr. Saño said that “it is innate among our group to have strangers engage if they want to paint.

“The next night, they came back to paint with us,” he said, joining Mr. Saño’s company of nine artists on the project.

The new marine biodiversity-themed mural is a project of the Security Bank Foundation Inc., the corporate social responsibility arm of Security Bank Corp. (SBC) which supports education, arts and culture through nationwide teaching programs and classroom building projects.

“The theme for the Makati underpasses was Philippine nature and since education is our corporate advocacy, we decided to take this opportunity [to] educate the public about issues that are affecting nature, specifically Philippine biodiversity, through art,” Alfonso L. Salcedo, Jr., SBC President & CEO, was quoted as saying in a press release. “We develop and support social responsibility initiatives all over the Philippines. This mural is one of the ways we hope to educate and inspire the Makati community.”

SBC invited “artivist” (artist-activist) A.G. Saño to redesign the Paseo De Roxas underpass mural, which formerly had a spaced-themed artwork, to a marine biodiversity-themed mural. Tilted Art in Defense of Mother Nature, the mural was launched on June 26, coinciding with the bank’s anniversary month.

Mr. Saño has painted more than 700 murals in 16 countries, and 600 murals around the Philippines which depict peace and environment. His advocacy extends to peace efforts in Mindanao as a founding member of the Board of Trustees of TPBPM (Teach Peace Build Peace Movement), an NGO focused on peace through education and the arts.

“There’s a lot of difficulty and there’s a lot of satisfaction as well,” Mr. Saño told members of the press, on being an artist-activist. “You are doing something for the betterment of society, hindi ’yung, gagawa ka lang for yourself (not just working for yourself), it’s an avenue for artists to do something more than personal expression.”

“If you are an artist-activist, you offer your work to the society without expecting anything in return,” he added.

THE MARINE LIFE MURAL
Done in blue, green, and white elastomeric paint, Art in Defense of Mother Nature depicts 47 different marine creatures clad in armor.

Mr. Saño explained that having the animals wear armor symbolizes that they are currently living beyond their natural defence mechanisms.

“My statement is that it is not enough, the natural defense mechanism of the species, that’s why they are decreasing and we are now in a big extinction crisis,” he said in a mix of English and Filipino.

“Gusto kong ipakita na may ipinaglalaban [tayo]. May beauty ’yung gusto nating i-proliferate (I want to show that we are fighting for something. There is beauty in what we want to proliferate),” he said.

The Art in Defense of Mother Nature mural is expected to be on view for three years. — Michelle Anne P. Soliman

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