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Alcohol, e-cigarette tax hike bags House 3rd reading OK

By Charmaine A. Tadalan
Reporter

THE MEASURE increasing excise taxes on alcohol products and e-cigarettes bagged third and final reading at the House of Representatives on Tuesday.

Its counterpart measure in the Senate went through initial deliberation in that chamber’s ways and means committee, with its chairman Senator Pia S. Cayetano targeting to approve higher rates against the House version.

With 184 affirmative votes, two negative votes and one abstention, House Bill No. 1026, principally authored by Albay-2nd district Rep. Jose Ma. Clemente S. Salceda, was passed by the chamber.

The measure proposed to increase ad valorem tax on distilled spirits to 22% of net retail price (NRP) per proof from 20% and a specific tax of P35 per liter from P24.33 in 2020. The specific tax rate will then increase by P5 every year until it reaches P45 in 2022, after which it will be increased by seven percent annually beginning 2023.

The measure will introduce a 15% ad valorem tax per liter on sparkling wines, which is not imposed under the present system; in addition to a P696 specific tax per liter in 2020, regardless of price. At present, sparkling wines costing P500 or less are levied P316.33 while those sold at a higher price are levied P885.72. This is also set to increase by seven percent annually thereafter.

Excise tax on still wines, meanwhile, will vary according to alcohol content. It will be increased to P40 per liter from the current P37.96 for wines with up to 14% alcohol volume and to P80 from P75.92 for those containing more than 14%. This tax will increase by seven percent annually.

For fermented liquor, such as beer and ale, the bill proposed to increase current excise tax to P32 in 2020, P34 in 2021 and P36 in 2022, with a seven percent increase every year thereafter.

Cooking wines with salt content of at least 1.5 grams for every 100 milliliters are exempt from excise tax.

E-CIGARETTES AS WELL
Amendments to the bill included provisions on e-cigarettes and vapor products.

Heated tobacco products, for one, will be taxed at a rate of P45 per pack starting January 1, 2020 and will increase by P5 in the years thereafter until 2023.

The bill further provided that tax rate for vapor products, containing nicotine salts, will increase by P5 every year from P30 in 2020 until it reaches P45 in 2023.

The Department of Finance (DoF) on Tuesday said in a Senate hearing that its proposed alcohol product excise tax increase is expected to generate P33.3 billion in 2020. This was cut by half in HB 1026, which is seen to bring in only P16.6 billion from alcohol products in the first year of implementation.

“Well for me, as long as I’m convinced about the goals set by the DoH, the funding they want to raise, [as well as] the other issues raised by the industries and other concerned parties are addressed, I’m more than happy to target the goal of DoF,” Ms. Cayetano told reporters after the hearing. “‘Cause I work with the administration, so that is my goal. As to whether I would be able to deliver that, we have to see.”

Department of Health (DoH) Undersecretary Rolando Enrique D. Domingo said the measure intends to sustain implementation of Republic Act No. 11223, or the Universal Health Care Act. “For 2020, we are asking P257 billion, but… the Department of Finance so far has only identified P195 billion, we have a gap of about 65 billion,” he told the panel.

Enactment of Republic Act No. 11346, which will increase excise tax on tobacco products to P45 per pack 2020 from the current P35, will contribute P15.5 billion, leaving a P46.9-billion funding gap.

The committee was tackling Senate Bill No. 383, filed by Senator Emmanuel D. Pacquiao, which adopted the DoF-DoH proposal, but does not cover excise tax increase on e-cigarettes.

The alcohol and e-cigarette excise tax increase was among the bills mentioned by President Rodrigo R. Duterte in his fourth State of the Nation Address on July 22.

The President also urged Congress to pass the proposal to reduce corporate income tax to 20% by 2029 from 30%; centralize real property valuation and assessment, and simplify the tax structure for financial investment instruments.

The government has so far enacted the Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Law, which slashed personal income tax and increased or added levies on several goods and services; RA 11213, the Tax Amnesty Act, which grants estate tax amnesty and amnesty on delinquencies, or delinquent accounts that remained unpaid after being given final assessment and RA 11346, which will gradually increase the excise tax on tobacco products to P60 per pack by 2023 from P35 currently.

The Senate bill proposed to increase the ad valorem tax rate to 25% of net retail price of distilled spirits and the specific tax rate to P40 per proof liter. The specific tax rate will increase by P5 annually until it reaches P55 in 2023, and will rise by 10% per year thereafter.

Sparkling wines will be levied with a P335 specific tax rate for bottles costing P500 or less and P937 for those costing more than P500. In 2020, excise tax on sparkling wines will cost P328.99 and P921.15, respectively.

Excise tax on still wines will increase to P40 in 2020 for wines with up to 14% alcohol volume and to P80 for those containing more than 14%. It will then increase 10% annually beginning 2021.

The bill also proposes that for fermented liquor, excise tax will increase to P40 in 2020 from P26.43 currently, to P45 in 2021, to P50 in 2022 and to P55 in 2023, with a 10% increase every year thereafter. — with V. A. C. Ferreras

BoI approves 24% more committed investments in seven months to July

THE BOARD of Investments (BoI) approved 24% more committed investments at P312.8 billion in the seven months to July, with majority of the inflows going outside Metro Manila, the agency said on Tuesday.

“This growth was still resilient enough to withstand the global demand downturn brought about by the lingering trade dispute between the US and China, the trade spat between Japan and South Korea and… geopolitical tensions,” Trade Secretary and BoI Chairman Ramon M. Lopez said in a statement. “We remain among the fastest growing economies in Asia and we are among the few countries to even register a 1.5% export growth in July.”

Mr. Lopez said investors continued to show “strong confidence” in the Philippines and the administration despite the challenges from global tensions. The provinces cornered 96.3% of total committed investments in the seven months.

Although local investments accounted for nearly 78% of the total at P243.2 billion, or a growth of 2.7%, foreign inflows recorded a significant increase of 348% to P69.6 billion.

Among foreign investors, Singapore remained the top source with P35.4 billion. Netherlands followed with P9.2 billion. Thailand came out third with P8.6 billion. Japan with P5.8 billion and the United States with P2.4 billion completed the top five investment sources.

Mr. Lopez said the Philippines had diversified its markets by identifying new destinations for more opportunities while ensuring that its domestic base remains strong and on the upswing to soften the impact of the trade disputes.

“The recent trade spat between Korea and Japan should urge us to escalate and complete the negotiation of the free trade agreement with South Korea and review or enhance the Philippines-Japan Economic Partnership Agreement to avail of more opportunities and exchanges with Japan. Despite the obstacles to global trade, we have to adapt as we make a push for our domestic industries to grow and move forward,” he said.

The BoI said power projects remained the biggest recipients of investments with P195.1 billion, up 65.3% from a year ago. The manufacturing sector accounted for P46.1 billion as investments jumped 132.6%.

The information and communication sector posted P33.2 billion, nearly a hundred times more than the P340 million last year. The tourism accommodation sector made up P9 billion, about eight times more than a year earlier. The human health and social work activities, or hospitals, recorded P1.8 billion, higher by 37% from a year ago.

Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo said investments were still growing despite international tensions. “We still have a lot of pending projects that need thorough study and evaluation. I am still confident that by the end of the year, we are going to attain our target despite the global uncertainties. We assure foreign investors that the Philippines is a safe haven for their investments and they should take advantage of our very strong domestic demand and commit to long-term deals,” he said.

Region IV-A or Calabarzon topped regions with P203.3 billion, or 65% of the total. Region III or Central Luzon came second with P29.3 billion. Metro Manila was third with P11.7 billion or 3.7%. Region II or Cagayan Valley had P10 billion, while Region VII or Central Visayas registered P9.4 billion to complete the top five regions.

In July, notable projects approved were the P1.7-billion Airbus plane project of Cebu Air., Inc.; the P1.4-billion, 9.4-megawatt hydropower project of At Dinum Co. in Nueva Ecija; the P728-million hydropower facility of Coto Hydro Corp. in Zambales; Integrated Meat and Poultry Processing Inc.’s P410-million poultry dressing plant in Bataan; and the P381-million low-cost housing project of Borland Development Corp. in Batangas. — Victor V. Saulon

Peso inches higher as US grants Huawei reprieve

THE PESO moved sideways on Tuesday after the US government granted a 90-day extension for Chinese telecommunications firm Huawei Technologies Co., Ltd. to buy US-made components to service its existing customers.

The local unit closed at P52.29 against the greenback on Tuesday, two centavos higher than Monday’s P52.31-per-dollar finish.

The peso opened the trading session at P52.37 against the greenback. It closed at its intraday high, while its worst showing for the day was recorded at P52.45 a dollar.

Dollars traded during the session climbed to $1.129 billion on Tuesday from $1.069 billion the previous day.

A trader interviewed via phone said the Huawei ban extension contributed to risk-on sentiment in Asian currencies, which includes the Philippine peso, “that’s why the market players opted to take profit” on Tuesday.

The peso strengthened on “positive developments in US-China trade talks and after Pres. Trump granted a new 90-day extension for the lifting of the Huawei ban,” another currency trader said via e-mail.

The United States will extend on Thursday a reprieve that permits China’s Huawei Technologies to buy components from US companies to supply existing customers, the Commerce Department said on Monday, but it also moved to add more than 40 of Huawei’s units to its economic blacklist.

The 90-day extension “is intended to afford consumers across America the necessary time to transition away from Huawei equipment, given the persistent national security and foreign policy threat,” the department said in a statement.

The US government blacklisted Huawei in May, alleging the Chinese company is involved in activities contrary to US national security or foreign policy interests.

Local financial markets are closed today in observance of Ninoy Aquino Day.

Meanwhile, most emerging Asian currencies declined on Tuesday, as the dollar firmed on hopes for fresh stimulus from global policy makers while the yuan, a bellwether for regional peers, weakened.

Investors widely expect the US Federal Reserve to cut rates again in September. The market’s focus will be Fed Chair Jerome Powell’s remarks at the annual symposium of global central bankers starting on Friday at Jackson Hole, Wyoming.

The Chinese yuan declined as much as 0.3%, touching a one-week low, before paring some of the loss.

OCBC said in a note that for Asian currencies, recovery of risk sentiment was offset by a weaker yuan in the wake of regulatory changes at China’s central bank. — M.T. Amoguis with Reuters

Fed’s Rosengren wants evidence of economic slowdown for easing

FEDERAL RESERVE Bank of Boston President Eric Rosengren continued to push back against further interest-rate cuts by the central bank, arguing he’s not convinced that slowing trade and global growth will significantly dent the US economy.

“We’re likely to have a second half of the year that’s much closer to 2% growth,” Rosengren said Monday in an interview with Kathleen Hays on Bloomberg Television. “I’m not saying there are not circumstances in which I’d be willing to ease. I just want to see evidence we are going into something that is more a slowdown.”

Rosengren, a voter this year on the Federal Open Market Committee, was one of two officials who dissented when the panel cut rates on July 31. Two days later he released a statement saying he did not see a “compelling case” for additional monetary accommodation, while also raising concerns that a cut would add to financial stability risks.

Kansas City Fed President Esther George also opposed the decrease, the first time Chairman Jerome Powell had faced a double dissent since he took the Fed’s helm in February 2018. Minutes of last month’s meeting will be released at 2 p.m. in Washington on Wednesday. Investors will also hear from Powell directly when he opens the annual central banker retreat in Jackson Hole, Wyoming on Friday.

The Boston Fed chief said policy makers have “plenty of things to be worried about,” ranging from slowing global growth and volatility in financial markets to geopolitical risks in the UK and Hong Kong.

Still, he expects a resilient American consumer will continue to drive economic output in the US, and the Fed shouldn’t try to boost economic activity in other countries by cutting rates.

“Just because other countries are weak, if we’re strong, it doesn’t necessarily mean we should be easing as well,” he said. “It’s much more efficient for China and Europe to expand their own economies” through their own policy actions.

Rosengren said he wasn’t overly concerned about the recent plunge in 10-year Treasury yields, which briefly fell below two-year yields last week. That, known as a yield-curve inversion, has preceded many past recessions.

“The goal of monetary policy is not to get the yield curve right, it’s to get unemployment and inflation right,” he said. Rosengren said he was not convinced Treasury yields were signaling a future dramatic rise in unemployment, which would spur rate cutting. — Bloomberg

Local SMEs to hike investments in digital technology — survey

SMALL and medium enterprises (SMEs) in the Philippines are planning to increase investments in digital technologies next year, a survey by United Kingdom-based Ernst & Young Global Ltd. (EY) showed.

The report, “Redesigning for the Digital Economy: A Study of SMEs in Southeast Asia” showed SMEs in the Philippines had an optimistic growth outlook for next year, recording the second- highest net positive score (NPS) in the region at 93.3%, trailing only Vietnam at 94%.

For Association of Southeast Asian Nations (ASEAN) member-countries, the average NPS stood at 86%, driven by the expectation of SMEs that revenues will grow by 12.6% this year.

The NPS is based on the responses of 368 senior decision makers in SMEs from the Philippines, Indonesia, Malaysia, Singapore, Thailand and Vietnam on whether they expect their businesses to grow 15-20% in 2020.

“The NPS score in the Philippines is favorable with resilient growth supported by its government’s infrastructure push and spending in this general election year. Rising wages in a tight labor market, coupled with softer inflation, are also boosting household spending,” the report said.

EY Regional Managing Partner Liew Nam Soon, who presented the results of the survey at a briefing in Makati City yesterday, said more Philippine SMEs are looking to boost investments in current and transformative technologies versus in fixed assets over the next three years.

About 88% of respondents from the Philippines said they would need heightened investments in current technologies by 2022, from 85% this year. Current technologies cover the upgrades and expansion of existing ICT assets such as network infrastructure.

For transformative technologies, 83.3% of the Philippine respondents said they would invest heavily on these by 2022, versus 71.6% this year. These technologies include artificial intelligence, blockchain, Internet of Things and smart sensors.

Meanwhile, investments in fixed assets are expected to slow down, as only 80% of the respondents said they would still need to prioritize these in 2022 from 83.3% this year.

Compared to the rest of the ASEAN region, SMEs in the Philippines are seen to be more active in investing in technology solutions in the next three years. The ASEAN average for investments in transformative technologies by 2022 is 80.7%, lower than the Philippines’ 83.3%. For investments in current technologies, the regional tally is again lower at 76.9% against the Philippines’ 88%.

“The incremental growth is a lot higher in the Philippines… because…it’s a catch-up game,” Mr. Liew said. “In many other markets like Indonesia and the Philippines, we see (SMEs) take this as an opportunity to leapfrog against the competition, and therefore the investments are a lot bigger.”

However, the report noted several operational challenges SMEs face, led by cybersecurity threats which was flagged by 75% of the respondents from the Philippines. Other challenges include sluggish customer demand (68.4%), human capital challenges (67.7%), competition from new entrants (67%) and rising production costs (66.7%).

But Mr. Liew said digital transformation can be key to solving many of SMEs’ problems, and one thing that could help is having more progressive regulatory compliance policies.

“Adopting a digital mindset goes beyond executing discrete projects within a specified timeframe. SMEs that successfully fuse digital into their DNA to deliver continuous innovation into everyday operations are those effectively redesigning themselves for the digital future,” he said. — Denise A. Valdez

Of augmented reality and social realities

By Michelle Anne P. Soliman, Reporter

ARTWORKS depicting social issues, graphite drawings and installations, and paintings of an industrial landscape viewed with augmented reality came out on top in the 16th edition of the Ateneo Art Awards held on Sunday at the Ateneo Art Gallery of the Ateneo De Manila University in Quezon City.

The three main prize winners for the Ateneo Art Awards-Fernando Zobel Prizes for Visual Arts were Archie Orclos’s Lupang Hinirang, Keb Cerda’s Super Nardo: False Profits, and Costantino Zicarelli’s Years of Dust Will Build a Mountain. The three artists were awarded residencies at the Artesan Gallery + Studio in Singapore, Liverpool Hope University in the United Kingdom, and La Trobe Art Institute in Australia, respectively.

The winners were chosen from a shortlist of 12, which, in turn, were chosen from 84 nominees.

Keb Cerda’s Super Nardo: False Profits — exhibited at Untitled, Art, an international art fair founded in 2012 in San Francisco — integrates new media and augmented reality. It is best viewed by downloading an app (which the artist also developed) which allows viewers to play the role of Super Nardo in a Super Mario-inspired game wherein the character collects gold and navigates through painted landscapes.

Costantino Zicarelli’s Years of Dust Will Build a Mountain was exhibited in Art Informal Makati. Mr. Zicarelli’s graphite drawings and installations present a mise-en-scène of destruction. “I was attracted to the idea of people digging a hole, especially the energy that they give channeled from the hands and the earth, creating nothing where there used to be something,” Mr. Zicarelli explained in a video.

Archie Oclos’s Lupang Hinirang was part of the 2018 Thirteen Artist Awards exhibit at the Cultural Center of the Philippines. Coming from a family of farmers, Mr. Oclos used sacks of rice for portraits of family members and printed words related to the lives of farmers. Meanwhile, a 20×70-feet mural titled Ang Mamatay ng Dahil Sayo depicts a covered dead body illustrated with lines, each one representing a victim of the current administration’s “war on drugs.”

“My art process involves a lot of immersion,” Mr. Oclos told BusinessWorld after the awarding ceremony, noting that he visited NGOs that advocate for human rights to collect data for his mural.

“This is the medium [street art] that I’m using since I did not have exposure to galleries and museums. I just really want to make art for the people,” he added.

Mr. Oclos’s Lupang Hinirang also bagged the People’s Choice Award, which was decided by votes cast by exhibition visitors.

Meanwhile Doktor Karayom’s Isla/nip, a giant board game with a dissected body as its centerpiece, claimed the Purchase Prize Award initiated by the Embassy of Italy in the Philippines where the work will be permanently displayed.

Finally, the Ateneo Art Awards-Purita Kalaw-Ledesma Prizes in Art Criticism went to John Alexis Balaguer and Mariah Reodica. Mr. Balaguer’s essay, “Everywhere is Here: The Museum as Heterotopia in Mark Lewis Higgins’ Gold in Our Veins,” tackled the said gold exhibition at the Ayala Museum. Ms. Reodica, on the other hand, wrote “Saltwater Trajectories: Bisan Tubig Di Magbalon, and Viva Excon as Cartographer,” which revolved around the 2018 edition of the Visayas Islands Visual Arts Exhibition and Conference (Viva Excon).

Ms. Reodica will contribute a maximum of two stories a month for Philippine Star beginning January 2020; while Mr. Balaguer will write six articles within a one-year period for Art Asia Pacific magazine.

The Ateneo Art Awards 2019 exhibit is on view at the third floor of the Ateneo Art Gallery in Arete, Ateneo de Manila University, Katipunan Ave, Quezon City, until Oct. 27; the art criticism pieces may be read at https://pkl.ateneoartgallery.com.

If negative yields are a drug, Europe is just saying no

VALEO SA used to be a stock-market darling until a slowdown in China and changing rules on emissions hammered the shares and hit its credit rating. Yet you wouldn’t know it looking at the debt market where the yield on a Valeo bond due in 2022 slipped below zero last month.

It looks like a golden opportunity for the French auto-parts maker to gorge on ultra-cheap borrowing. But it isn’t interested — and the restraint tells you everything about the European Central Bank’s (ECB) uphill battle to revive animal spirits.

“Low interest rates are like a mild drug,” said Chief Executive Officer Jacques Aschenbroich. “There’s an addicting effect that we want to avoid. We don’t say: debt is cheap so we will pile up debt.”

Valeo joined the likes of Unilever NV and SAP SE in the €1.1-trillion ($1.2 trillion) global pool of corporate debt trading with yields below zero, according to data compiled by Bloomberg. The stockpile of negative obligations across all markets hit a record $16.7 trillion last week, and could swell further as the ECB preps fresh stimulus.

If companies lock in these rates in the primary market, they could in effect be getting paid to borrow. But don’t expect a borrowing binge to finance acquisitions or share buybacks. Growing signs that Europe is headed into a recession — with the German government preparing a stimulus program to weather a deep slump — mean treasurers have plenty of reasons to resist.

“Leverage in Europe is low and it could stay that way — even though many companies are able to issue debt with negative or record-low yields,” said Mahesh Bhimalingam, a credit strategist at Bloomberg Intelligence. “It’s hard to see the appeal of loading up on debt to make an investment when the potential return on that investment looks highly uncertain, given the outlook in Europe.”

French luxury goods maker LVMH and drug maker Sanofi are among a small handful that issued debt this year with negative yields — the securities had a coupon of zero and investors paid more for them than the face amount. It’s hardly a wave.

For that to happen, companies may need to reconsider the restraint they’ve shown since the ECB started cutting rates and buying debt. Weak confidence in the outlook for growth and profits will only entrench their reluctance.

The average ratio of net debt to operating earnings before interest, tax, depreciation and amortization for European investment-grade corporate bonds was 1.7 times in 2009, according to Fitch Ratings Inc. The rating company forecasts average leverage of just 1.6 times in 2019.

STABLE LEVERAGE
“This is the time to take debt because you can lock it in for 30 years,” said Sharon Katz, associate professor of accounting and control at Insead Business School in Fontainebleau, France. “Not all companies will go for it. If you have a cash flow problem, you still need to pay the principal at some point.”

Consider Altice Europe NV. Only a few years ago, the Amsterdam-based telecommunications company was well known in the debt market for its soaring leverage. So even though the yield on one of its securities turned negative in July, it’s keeping the focus on cutting borrowing and disposing assets.

“We expect to significantly reduce interest expense in the next two years as we are deleveraging rapidly,” Dennis Okhuijsen, an adviser to the company, said on an earnings call last month. “As always we are refinancing and reviewing our refinancing options.”

Don’t rule out a shift by executives entirely. Shareholders could become an important source of pressure on treasurers, Bank of America Merrill Lynch Corp. analysts led by Barnaby Martin said in a recent note. The issuance could finance mergers, dividend payments or to plug gaps in cash flow, they said.

“It’s quite possible that a company could be tempted to take on ever more leverage in a world where earnings growth is more feeble,” said Oystein Borsum, strategist at Swedbank AB. “How else are you going to get earnings going?”

European firms can be forgiven for failing to spot a raft of investment opportunities in a world of weak demand and policy uncertainty. Many seem aware of the risks. Nordic brewer Carlsberg A/S, for one, has focused on cutting debt and reducing costs in recent years.

“The moment you get seduced by low rates and companies feel like they have to use them to do very big things — maybe bigger than they can absorb — they have to remember they all have to pay the bill later,” said Cees’t Hart, CEO of Carlsberg. “There are many companies that have been a lot more aggressive than we have who have then gotten into problems afterwards.”

If corporates don’t play ball, it raises questions about whether the ECB’s fresh round of stimulus would revive business activity and inflation. — Bloomberg

AirAsia PHL looking to mount flights to Guam

PHILIPPINES Air Asia, Inc. is hoping to swing to profit this year. — COMPANY HANDOUT

By Denise A. Valdez, Reporter

PHILIPPINES AirAsia, Inc. is planning to mount flights to Guam, once it receives Civil Aeronautics Board (CAB) approval for its application seeking air entitlements to the United States.

Ricardo “Ricky” P. Isla, the company’s chief executive officer, said in a text message on Monday the long-haul flight will boost the budget carrier’s existing routes to about 15 international destinations.

“Upon receipt of designation, AirAsia will be ready to apply for an operating permit to operate flights specifically to Guam,” he told BusinessWorld.

“With a fleet of 24 Airbus A320 aircraft, AirAsia is capable of launching the flights as soon as permits are ready,” he added.

The Philippine unit of the Malaysia-based airline filed an air traffic access application with the CAB last week, which will be discussed in a hearing on Sept. 10.

The AirAsia Group started its flights to United States in 2017, when its long-haul unit AirAsia X Bhd launched its maiden flight to Hawaii from Kuala Lumpur, Malaysia via Osaka, Japan.

Anthony Francis “Tony” Fernandes, chief executive officer of the AirAsia Group, was quoted as saying last year that the company is keen on opening flights to Los Angeles and San Francisco from Japan by 2020.

“We are hopeful that the (CAB) will grant our petition to designate AirAsia as an official Philippine carrier to the USA,” Mr. Isla said, noting the local unit’s plan to join the group-wide effort of AirAsia to expand links to the US.

In the Philippines, Philippine Airlines (PAL) and Cebu Pacific both currently offer flights to Guam, but the latter will be suspending its operations by yearend as part of “optimization” efforts.

When Cebu Pacific — known for its cheaper fares, like Philippines AirAsia — launched its Manila-Guam route in 2016, competing airlines dropped fare prices to the destination by as much as 25%.

The international network of Philippines AirAsia currently include Bangkok, Hong Kong, Macau, Incheon, Osaka, Canton, Kaohsiung, Shanghai, Kota Kinabalu, Shenzhen, Denpasar, Kuala Lumpur, Singapore, Kunming and Taipei.

The company hopes to swing to profit this year from a net loss of P2.11 billion in 2018. It booked a profit of P424.5 million in the first quarter, up 12% year on year due to a 23% increase in its passenger volume to 1.97 million.

It is also targeting to conduct an initial public offering before the year ends.

NAMCYA: the 46-year-old handmaid of cultural development

NATIONAL Artist for Music Ramon Santos thinks it is unimaginable to live in a world without music. “Walang kakanta ng ‘Happy Birthday’? Walang kakanta sa kasal? Walang radyo? (No one will sing ‘Happy Birthday’? No one will sing at weddings? There will be no radio?) Can you imagine a world like that?” he said. “Music is a gift for humanity, kaya hindi pwedeng mawala ang music (that’s why music cannot be lost).”

This month, the National Music Competitions for Young Artists (NAMCYA) presents “Alab ng Musika: Wagi #galingNAMCYA” at the Main Theater of the Cultural Center of the Philippines on Aug. 23.

The country’s most prestigious competition for young musicians, NAMCYA has identified and nurtured Filipino musicality since 1973. For 46 years, the competition has done its part “to preserve, develop, and promote Philippine music as an art and as a handmaid of cultural development.” During its first year, it introduced competitions for choir, piano, solo instrument, and family ensemble.

“Ang ating mga tradisyon, tayo lang ang nakakagawa noon (We are the only ones who practice our own traditions),” said Mr. Santos, who is a member of the NAMCYA Board of Trustees, at the press launch in Dusit Thani Manila in Makati City.

Mr. Santos explained the importance of playing traditional instruments: “Kailangan nating malaman ang mga ito sapagkat kung hindi natin alam iyan, parang wala tayong identity (We need to know them because if we don’t, it is as if we have no identity).”

The concert will feature award-winning cellist Giancarlo Castrillo Gonzales; the DYCI Dagalak youth choir from Bulacan led by Nelson dela Cruz; youth string orchestra Pundaquit Virtuosi led by Alfonso “Coke” Bolipata; and the University of Santo Tomas Symphony Orchestra led by Dr. Renato Lucas, president of NAMCYA and principal cellist of Philharmonic Orchestra.

Following the concert on Aug. 23 is “NAMCYA @ ALABANG 400: The Cellist and The Apprentice,” a free mini-concert on Aug. 24 at Alabang 400 Village Clubhouse. The performance features Mr. Lucas and Joshua Ethan Dakanay, both on cello, with Denzel Abarquez on piano.

Aside from discovering and developing young Filipino musicians from around the country through annual competitions, NAMCYA also organizes workshops and cultivates Filipino music by commissioning and performing new works.

“We need the general public to understand the work that NAMCYA does. We’re reaching out to extremely talented young people,” NAMCYA chair Maria Paz Lagdameo said on the struggle of performing artists with regard to promotion and performance opportunities.

The competition is open nationwide to professional and non-professional music ensembles, choirs, instrumentalists, and solo performers who are below 30 years old. This year’s competitions will start on Aug. 31 in different parts of the country for the semifinal round; with the finals week on Nov. 26 to Dec. 1 at the CCP.

“We’ve been in existence for 46 years, we’d like to be able to say that we will be there for the next 25 years. With the Filipinos proud of every young artist who makes it to the international scene, not only nationally but in the very community where they live,” Ms. Lagdameo said. — Michelle Anne P. Soliman

For tickets, contact the NAMCYA Secretariat at 836-4928, 836-4929 or 0949-9932592, or visit https://www.facebook.com/NAMCYA/.

SSS benefit, pension disbursements rise

THE SOCIAL Security System’s pension and benefit disbursements climbed in the first half.

THE SOCIAL Security System (SSS) has released benefits and pensions worth P95.71 billion in the first six months to its 3.19 million members, with the bulk going to retirement funds.

In a statement on Tuesday, the state pension fund said it disbursed P55.7 billion worth of retirement benefits to 1.57 million pensioners from January to June, 8.6% higher than the P51.28 billion released in the same period last year.

Payouts for death claims by one million beneficiaries saw an increase of 4.8% to P28.63 billion in the first half from P27.32 billion a year ago.

Disbursements for disability and funeral benefits in the January-June period respectively totalled P3.59 billion, up 7.8% year-on-year, and P2.14 billion, up 9.7%, and went to 208,863 recipients.

Sickness benefits also climbed 14.9% to P1.51 billion in the first semester from the P1.32 billion logged in the same period last year, and went to 235,000 members.

SSS President and Chief Executive Officer Aurora C. Ignacio said in the statement that the growth in beneficiaries and claims may be attributed to the implementation of the Republic Act (RA) 11220 Expanded Maternity Leave Law in May and RA 11199 or the Social Security Act of 2018 signed into law last February.

RA 11220 increased the paid maternity leave to 105 days from 60 days, with an additional 15 days for solo mothers.

Meanwhile, RA 11199 adjusted SSS’ contribution rate to 12% from 11% and the monthly salary credits of its members to a minimum of P2,000 and P20,000 maximum.

“In the first half of 2019 alone, the number of beneficiaries and claims have already posted significant growth since the implementation of new laws and policies of the administration,” Ms. Ignacio said.

Meanwhile, total revenues of the state pension fund increased to P115.53 billion in the first half, up 20.9% from last year’s P95.55 billion, SSS said in the statement.

Broken down, contribution collections and investments and other income stood at P99.08 billion and P16.45 billion, respectively, in the first half, which SSS said climbed due to the higher contribution rate and monthly salary credit.

“Further, our investment and other income bounced back this period driven by strong and favorable market conditions,” Ms. Ignacio added.

SSS’ assets stood at P542.27 billion at end-June, 6% higher than the P511.47 billion booked in the comparable year-ago period.

“With our strong financial performance this semester, we are hoping to further strengthen the fund and ensure the continued service and providing for more and more members in the future until perpetuity,” Ms. Ignacio said. — BML

Green bond supply growing in Asia Pacific

MORE companies have been pursuing green and sustainable projects over the last five years, with funds raised in the global green bond market rising to more than $167.3 billion as of end-2018.

Citing data from Climate Bonds Initiative, Singapore-based City Developments Limited Chief Sustainability Officer Esther An noted the issuance of green bonds surged to $167.3 billion in 2018, from less than $50 billion in 2014.

The Asia-Pacific region accounted for 22% of the global green bond market, mostly due to mature markets such as China, Korea, Japan, and Hong Kong.

“Asia Pacific is growing, of course majority of it is actually from China. But ASEAN (Association of Southeast Asian Nations) definitely is in the best position to grow,” Ms. An said during the United Nations Global Compact (UNGC)-Global Reporting Initiative Sustainability Summit in Pasay City yesterday.

Proceeds for about 60% of these bonds were used for green buildings, energy, and transport projects.

Ms. An, who is also a UNGC Sustainable Development Goal (SDG) Pioneer for Green Infrastructure and a Low-Carbon Economy, said that ASEAN has a projected demand of $3 trillion for green investments until 2030.

This demand is driven by several factors including a growing population, higher consumption, heightened green consciousness, and the rise of value-based investors.

The growing demand from investors to see more companies adhering to sustainable practices has also prompted conglomerates such as SM Investments Corp. (SMIC) and Ayala Corp. (AC) to align their business strategies with a global framework.

For instance, SMIC Adviser Hans T. Sy said the SM Group has integrated three platforms in terms of its operations and sustainability, including investing 10% of its capital expenditure on disaster-resilient features depending on a mall’s existing hazards; capacity building and collaboration; as well as public-private partnerships at the global, regional and national levels.

“Through these efforts, we seal our commitment in creating a more equitable and progressive environment for business partnerships for generations to come,” Mr. Sy said in a speech in the same forum.

The listed conglomerate has also been supporting small-and-medium enterprises to help them continue business operations amid disasters.

Meanwhile, AC Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala said they have identified three challenges to focus on, namely marginalization, large untapped potential of human capital, and irresponsible growth leading to long-term environmental damage.

“The Ayala Sustainability Blueprint, specifically designed to support the achievement of the UN Sustainable Development Goals by 2030, has allowed us to be more deliberate in monitoring and evaluating our sustainability targets and will help us allocate resources to these initiatives more appropriately,” Mr. Zobel said in a speech during the forum. — Arra B. Francia

Statue of ‘comfort women’ pulled from Japan exhibit finds new home

MADRID — A Spanish businessman has bought a statue symbolizing women forced to work in Japanese military brothels which was removed from an exhibition in Japan after organizers received threats over the piece.

The Statue of a Girl of Peace symbolizes the “comfort women,” a euphemism referring to women, many of them Korean, forced into the brothels before and during World War Two.

Estimates vary, but historians say thousands of women may have been involved. There are currently 20 survivors registered with the South Korean government and the subject remains a sensitive one in both countries and elsewhere in Asia.

The work was removed after it attracted “terror threats” via telephone and e-mail as soon as it went on display this month at the Aichi Triennale art exhibition, Aichi Prefecture Governor Hideaki Omura told a news conference on August 3.

Businessman Tatxo Benet said he plans to display the work, which depicts a young woman wearing a traditional Korean dress sitting on one of two wooden chairs, in a “Freedom Museum” he plans to open in Barcelona as early as next year.

Mr. Benet, founder of soccer rights company Imagina (Mediapro), said the museum would exhibit around 60 pieces of artwork that have been censored in different parts of the world.

“A year and half ago I began buying artwork censured around the world for different reasons whether political, ethical, moral or sexual,” Mr. Benet told Reuters in a telephone interview.

After reading about the furor caused by the statue in Japan, he bought it, he said.

“I think I have enough material for a permanent exhibition center and perhaps even a documentation and archive center about censorship in the art world,” Mr. Benet said.

His collection includes a Lego brick portrait by Chinese dissident artist Ai Weiwei, a satirical painting of Donald Trump by Illma Gore and a video by David Wojnarowicz censored by the Smithsonian National Portrait Gallery in Washington.

From Spain, the exhibit will include a set of pictures of jailed Catalan separatist leaders which was removed from Madrid’s ARCO art fair last year.

Organizer Ifema said at the time that the controversy surrounding the pictures was hurting the visibility of other art works, an explanation which sparked complaints from separatist political parties and the left-wing Podemos party.

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