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Gov’t makes full award of T-bills as rates drop

THE GOVERNMENT fully awarded the Treasury bills (T-bill) on offer yesterday, with rates slipping across all tenors as market participants await the trade meeting between the United States and China later this week.

The Bureau of the Treasury (BTr) raised P15 billion as planned via T-bills auction on Tuesday versus total offers worth P50 billion, more than thrice the amount it wanted to borrow.

Broken down, the Treasury accepted P4 billion as planned for the 91-day papers out of the P11.14 billion offered by banks and other financial institutions. The average rate slipped 6.8 basis points (bp) to 4.385% from the 4.453% quoted in the previous offer.

The government also made a full award of the 183-day debt notes it placed on the auction block, borrowing P5 billion as planned versus total offers amounting to P16.85 billion. The average yield also declined by 13.3 bps to 4.723% from last week’s 4.856%.

The BTr likewise fully awarded the 364-day bills, accepting P6 billion out of total bids worth P22.016 billion. Its average yield slid 6.4 bps to 4.986% from the 5.05% tallied in the previous auction.

At the secondary market on Tuesday, the three-month, six-month and one-year papers were quoted at 4.528%, 4.818%, and 5.016%, respectively.

Deputy Treasurer Sharon P. Almanza said the Treasury was pleased with the auction result as it was within expectations.

“There’s still wait and see (mood in the market) because, for one, there’s the talk between (US President Donald J. Trump and Chinese President Xi Jinping) during the G20 Summit,” Ms. Almanza told reporters yesterday.

Reuters reported that senior officials from Washington and Beijing spoke through telephone on Monday to discuss trade and agree to maintain communications.

The conversation was ahead of talks between the leaders of China and the US, raising hopes both countries will reach a deal after trade negotiations collapsed in May.

Ms. Almanza said market players also priced into their bids the announcement of the June inflation forecast of the Bangko Sentral ng Pilipinas (BSP) as well as the “easing mode” of the local central bank and the US Federal Reserve.

“Besides, it’s been announced that for the third quarter, it’s very likely we will be reducing the volume. That was also priced in during the auction,” she added.

National Treasurer Rosalia V. De Leon earlier said the Treasury’s programmed borrowing next quarter will be lower than April-June’s P315-billion program due to “slow” government spending earlier this year.

Sought for comment, a trader said the auction result was also within expectations amid continued strong demand from investors.

“We still saw slightly lower yields on the back of stronger peso and lower US Treasury yields due to the dovish Fed,” the trader said in a phone interview.

Meanwhile, Robinsons Bank Corp. peso debt trader Kevin S. Palma said rising chatter that the Treasury will borrow less next quarter as well as the P9.3 billion in government debt set to mature on July 26 “may have helped bolster demand for this auction.”

The government is looking to raise P1.189 trillion this year from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of the country’s gross domestic product. — Karl Angelo N. Vidal

A field trip around Intramuros

By Michelle Anne P. Soliman, Reporter

IT TOOK around 10 minutes for the tram to get from the Manila Hotel to Intramuros via Bonifacio Drive. It was a warm morning on the country’s 121st Independence Day celebration and media guests were on a cultural tour from the hotel to the Walled City. First stop (among six locations): Fort Santiago.

The 64-hectare capital of the Spanish Empire in the East was protected by walls and fortifications stretching for 4.5 kilometers, hence the name “Intramuros” meaning “within the walls.”

The city was home to important offices of the state, a trade center between Europe and the East, the seat of the Roman Catholic Church in the Philippines, and the home of the oldest universities and colleges in Asia.

In 1979, Presidential Decree No. 1616 recognized Intramuros as a “Monument to the Hispanic period of Philippine history” and established the Intramuros Administration (IA) which is focused on efforts for the city’s restoration and development.

On Independence Day, The Manila Hotel, in partnership with the Intramuros Administration, launched Visita Intramuros, a tour program focusing on the history of the 107-year-old hotel and the Walled City.

“A native has a tendency to take for granted the places which are important and are near to [you],” The Manila Hotel president Joey Lina said at the press launch at the hotel’s Roma Salon.

“It’s fun to know your history and expand your knowledge of places and events. For better world understanding and for people’s understanding of themselves, they have to go back to the past,” he added.

The project has been in the works for two years as a way “to re-establish the Filipino identity in Intramuros,” according to IA administrator Guiller B. Asido.

A CULTURAL TOUR
Visita Intramuros offers a half day tour that includes a view of The Manila Hotel’s premium rooms and followed by a trip to the Walled City. After all, the hotel did have a role to play in Philippine history.

The hotel staff first escort guests to the 330-square meter MacArthur Suite which served as the American general’s residence in the 1930s. It is decorated with rare paintings and photographs, and the general’s medals hang on a wall in what was his office. Guests are then led to the Champagne Room, a dining area well-known for its impeccable service and lavish decor. The short tour at the hotel ends at the Manila Hotel Heritage Museum, a newly opened museum that houses the collections of the hotel.

Outside the hotel the guests can choose their mode of transportation — the siklesa or a motor-drawn kalesa (carriage), an Innova van, or a Grandia van — for the tour around the Walled City. The tour makes stops at the following locations: Fort Santiago, one of the country’s oldest fortifications which built in 1571 and served as the headquarters of the Spanish and Japanese; the newly opened Museo de Intramuros at the reconstructed San Ignacio Church which houses the IA’s ecclesiastical collection; Baluarte de San Diego, the circular fort formerly called Nuestra Señora de Guia; the Destileria Limtuaco Museum, a museum focusing on the country’s oldest distillery; Bahay Tsinoy, a museum showcasing the history and influence of the Chinese in the country; and Casa Manila, a three-story lifestyle museum showcasing the life of the upper class in the 19th century.

“The Department of Tourism sees cultural tourism as one main program to attract tourists from outside to come here and serves as a key product that will allow our domestic tourist to experience our unique culture,” said Roberto Alabado III, Department of Tourism Assistant Secretary for Tourism Development Planning.

The tour package may be booked with The Manila Hotel’s concierge. Tour prices start from P2,250, with three options of either a vehicle with driver; vehicle, driver and guide; and vehicle, driver, guide and all-in pass. In-house guests may avail of a 15% discount on the tour prices.

For information, contact The Manila Hotel at 527-0011.

Petron successfully lists P20 billion worth of preferred shares

PETRON Corp. reported its income dropped in the first quarter of 2019. — WWW.PETRON.COM

PETRON Corp. successfully listed P20 billion worth of preferred shares on the Philippine Stock Exchange yesterday.

The oil refining and marketing company said in a statement Tuesday the offer represents the base of P15 billion and the oversubscription of P5 billion, which reflects a “strong response of the institutional investors and trading participants.”

“The success of this fundraising exercise highlights our position as the leading oil player and as a viable investment option… We remain committed to fueling economic growth and to bringing greater value to our shareholders,” Petron President and Chief Executive Officer Ramon S. Ang said in the statement.

Petron noted this was the company’s biggest preferred shares offering in history.

Stockholders that subscribed to the offering will receive dividends per annum based on a 6.8713% rate for those under Series 3A preferred shares, and 7.1383% rate for those under Series 3B preferred shares.

The Series 3A preferred shares are redeemable 5.5 years from the date of the issuance, while Series 3B preferred shares are redeemed after seven years.

Petron earlier said a portion of the proceeds from the listing will be used to redeem the company’s outstanding Series 2A preferred shares which were issued in 2014. The remainder will be used to repay outstanding short-term debt and for general corporate purposes.

The company tapped BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp. and PNB Capital and Investment Corp. as joint issue managers, joint lead underwriters and joint bookrunners for the listing. First Metro Investment Corp. was the co-lead underwriter.

In the first quarter, Petron saw its attributable net income fall 80% to P1.11 billion, brought by a 4% drop in revenues.

It is investing more than $1 billion to expand its presence in the country this year. One of its projects is the construction of two stream boilers in its refinery in Limay town, Bataan. — Denise A. Valdez

Hanjin creditor banks eyeing shipyard’s sale, shares in parent to recoup funds

THE FIVE local banks exposed to the troubled Hanjin Heavy Industries and Construction Philippines (HHIC-Phil) are exploring a two-pronged approach to recoup their funds, an official from Rizal Commercial Banking Corp. (RCBC) said.

RCBC Head of Strategic Initiatives John Thomas G. Deveras, Jr. told reporters following the lender’s annual stockholders’ meeting that the five banks exposed to HHIC-Phil are eyeing to sell the shipyard in Subic and their shares in Hanjin’s parent firm.

On Jan. 8, the South Korean shipbuilder filed for a corporate rehabilitation before an Olongapo court, leaving some $412 million in outstanding loans from BDO Unibank, Inc. Metropolitan Bank & Trust Co., Land Bank of the Philippines, Bank of the Philippine Islands and RCBC in limbo.

“Essentially, the way we are going to recover that is through two methods. About $263 million of that exposure is tied to the Subic shipyard. So we’re in the process now of evaluating interest to buy the Subic shipyard from the banks,” Mr. Deveras said on Monday.

“[W]e’re waiting for an offer from a consortium to acquire the shipyard from the banks.”

According to the bank executive, foreign shipbuilding firms have expressed interest to take over the facility located at the Subic Bay Freeport Zone.

“Shipbuilding actually requires a lot of technology, supplier ecosystem, and knowledge of the different shipping segments which means you have to be attuned to trade flows across the world. I don’t think local groups have this knowledge,” Mr. Deveras said.

Mr. Deveras denied that tycoon Enrique K. Razon, Jr. was interested in buying the facility, contrary to earlier reports.

“I don’t know where you’re getting the news that Enrique Razon is doing an offer or showing interest. I’ve never met him, so I don’t know what he’s talking about.”

In April, Mr. Razon’s International Container Terminal Services, Inc. (ICTSI) said it is negotiating with banks for the possible acquisition of HHIC-Phil’s assets.

ICTSI is looking to turn the property into a multipurpose facility since Mr. Razon said they are not interested in the shipbuilding business.

Given the interest to acquire the facility from foreign shipbuilding firms, Mr. Deveras said the banks are “agnostic” with the nationality of the potential buyers.

“We’re approaching this as a commercial transaction but because there are geopolitical angles to consider, the government has a final say who they will agree with the banks’ transfer of shipyard,” the official said.

Apart from selling the shipyard, Mr. Deveras said the five local banks are also eyeing to sell their shares in HHIC-Phil’s South Korean parent firm.

“The other method of recovery will be through shares in Hanjin Korea. Of the $412 million exposure, $149 million has been converted into a 20% stake in Hanjin Korea,” he said.

“So when the shares of the Philippine banks are unlocked by December, hopefully the share price goes up and then we’re able to sell at a gain so that we’re able to recover the $149 million.”

The banks downplayed Hanjin’s soured loans, saying they have the financial footing to weather default.

The Bangko Sentral ng Pilipinas earlier said HHIC-Phil’s outstanding debt is “negligible” compared to the total loans of the industry.

On top of Hanjin’s debt to local banks, it was also reported that the shipbuilder also owes around $900 million to South Korean lenders. — Karl Angelo N. Vidal

Drahi’s bid for Sotheby’s puts the Art world in play

IN A career defined by audacious takeovers, Patrick Drahi’s bid for Sotheby’s ranks as perhaps the most surprising of all.

The French-Israeli tycoon has long followed his own path in business, tapping the market for junk-rated debt to help build the second-biggest telecom company in France. And Drahi shunned the elite bastions of Paris by listing Altice Europe NV in Amsterdam and settling in the alpine town of Zermatt, Switzerland.

When this consummate outsider announced on June 17 that he would shell out $2.7 billion to purchase Sotheby’s, the iconic 275-year-old auction house, a raft of questions followed. Is he seeking a trophy asset to sit on his shelf, or will he shake up a firm that had seen its share price tumble by 40% in a year? Is it wise to pile more debt onto Sotheby’s? And just who is Drahi anyway?

One thing is already clear: the bid opens a new chapter for an entrepreneur who turned a $9,000 student loan into an $8.5 billion fortune, making him the sixth-richest person in France, according to the Bloomberg Billionaires Index.

It’s also possible that other bidders could challenge Drahi’s offer, which was set at a 61% premium to Sotheby’s closing share price on June 14. On Friday, the New York Post reported that other potential buyers may be circling, which pushed the firm’s stock above the offering price. If Sotheby’s accepted a rival bid, it would have to pay Drahi a termination fee of almost $111 million, according to a regulatory filing.

SOTHEBY’S MAY GET OTHER OFFERS AFTER DRAHI
In any event, Drahi, 55, said little about his reason for the acquisition in Monday’s statement, save that he’s long been a client and admirer of Sotheby’s. He declined to be interviewed for this article.

Arthur Dreyfuss, a spokesman for Drahi, said the purchase “is a long-term family investment in an industry he is passionate about.”

ART LOVER?
The bid roiled the art world and sent dealers scrambling for information about the man, who wasn’t widely known as a serious collector. Experts steeped in the ebb and flow of the market were hard-pressed to identify what paintings he’s bought, although a person with knowledge of Drahi’s collection said he owns pieces by Picasso, Matisse, and Chagall, as well as works by 19th century French masters Gericault and Delacroix.

Born in Casablanca, Drahi moved to southern France from Morocco when he was 15. He attended his first art auction around then, though at that age he could only observe. That changed by 2007, the year he cobbled together regional cable operators into a new company called Numericable. Drahi likes to steal an hour or two while on business trips and visit local galleries and cathedrals, as he did on a recent detour to the Louvre’s outpost in the northern French city of Lens, said the person, who asked not to be identified.

‘INSTANT FAME’
Taking Sotheby’s private after 31 years on the New York Stock Exchange will certainly make Drahi an influential figure in the market for fine art and collectibles, which amounted to $67.4 billion last year, according to an annual report published by UBS Group AG and Art Basel.

He will stand opposite Francois Pinault, the French billionaire who founded a luxury-goods empire that encompasses names like Gucci and St. Laurent and controls Christie’s, Sotheby’s historic rival. In acquiring Sotheby’s, Drahi would mirror A. Alfred Taubman, the late American shopping mall developer, who scooped up Sotheby’s in 1983 and took it private.

“People didn’t know Alfred incredibly well at the time, but it gave him instant fame in the art and cultural world,” says Warren Weitman, a former Sotheby’s executive and co-founder of Art Market Advisors in New York.

Owning Sotheby’s would give Drahi a first look at pieces coming onto the market, plus a ready outlet for selling his own works, industry experts said. Taubman bought sculptures by Alberto Giacometti and paintings by Georgia O’Keeffe and Picasso, among others, at auctions, and by the time of his death in 2015 he’d amassed a collection once valued at $500 million. (The businessman was convicted of price fixing in an industry-shaking trial in 2001 and served almost 10 months in prison).

‘COVETED WORKS’
For his part, Pinault is among the world’s top collectors with works from virtually every major modern, postwar, and contemporary artist. His $1.2 billion collection is so vast that he exhibits pieces in two palazzos in Venice and is building a museum in Paris.

“I am sure the idea of access to the most coveted works before anyone else is an additional perk to this acquisition in the back of Drahi’s mind, as must have been the case with an obsessive collector like Mr. Pinault,” says Wendy Goldsmith, founder of Goldsmith Art Advisory, a London-based consulting firm.

Yet Drahi will be on the hook should the finances of his new acquisition go sideways. Buffeted by sudden swings in buying activity, the art world can be a volatile and inscrutable place. In 2016, for instance, sales in China slid sharply and contributed to a 16% drop in revenue at Sotheby’s, says Alex Maroccia, an equity analyst with Berenberg Capital Markets in London.

MOODY’S REVIEW
Despite the astronomical sums paid for top works — Claude Monet’s ethereal rendering of haystacks called Meules fetched $110.7 million at Sotheby’s in May — the company has struggled to post consistent growth. In 2018, the firm, which makes money primarily by sales commissions, earned $108.6 million in net income on $1 billion in revenue, an 8.5% skid from 2017. In the first quarter of this year, it lost $7 million.

On Tuesday last week, Moody’s said Sotheby’s adjusted debt was five times its earnings before interest, tax, depreciation and amortization — a high level for a luxury-goods concern. Moody’s, which already ranks Sotheby’s debt at below investment grade, placed the firm on review for a credit-rating downgrade. Drahi may be planning on financing a big chunk of his deal by selling more junk-rated debt.

HIGH TECH SHAKEUP?
Drahi, a graduate of France’s elite engineering school, Ecole Polytechnique, may be tempted to bring his technological expertise to bear. Sotheby’s mobile-phone app already permits users to bid around the clock in online auctions of fine books and manuscripts or 19th century European paintings. Last year, the firm bought a New York startup called Thread Genius that uses “image recognition” software to ply users with art they may like based on past purchases. It’s widely accepted that the art market is long overdue for the type of digital revolution that transformed other industries.

But if Drahi is contemplating using digital automation to slash salaries, Sotheby’s biggest expense, he may want to think again, experts said. The auction business is still driven by the relationships between sales representatives who know what art buyers want and well-heeled customers who require hand-holding and trust.

“Patrick Drahi may have some wiggle room to cut costs, but not massive wiggle room,” says Franck Prazan, the owner of Applicat-Prazan gallery in Paris.

More than anything, the art world is bracing to see how Drahi, the newcomer, will square off against the veteran Pinault. Locked in a fierce rivalry, Christie’s and Sotheby’s control about 20% of the global art market, according to the UBS report. Christie’s had $7 billion in sales last year, compared with $6.4 billion at Sotheby’s.

Whatever course Drahi takes, there’s bound to be drama as Sotheby’s rejoins Christie’s in the opaque world of private ownership and a new player makes his imprint on an idiosyncratic industry.

“Every successful businessman who gets involved with the auction houses thinks that he can reinvent the wheel,” says Goldsmith, the art adviser. “Mr. Drahi may indeed find that he can’t reinvent the wheel, but he will have a lot of fun trying.” — Bloomberg

DoLE to check GMA Network’s compliance with occupational safety standards

THE Department of Labor and Employment (DoLE) is looking into GMA Network, Inc.’s compliance with occupational safety and health (OSH) standards, after veteran actor Eddie Garcia suffered a fatal injury on the set of a new TV series.

Labor Secretary Silvestre H. Bello III said Occupational Safety and Health Center (OSHC) Executive Director Noel C. Binag and DoLE Undersecretary Ana C. Dione will meet with GMA Network officials on Wednesday.

“I’m issuing a memo to executive director Binag of the Occupational Safety and Health Center to conduct an inspection and find out if the company involved with whatever show that is — was compliant with the Occupational Safety and Health Standards,” he told reporters on Tuesday.

Mr. Garcia suffered a neck fracture after falling on the set of GMA show Rosang Agimat in Tondo, Manila last June 8. The 90-year-old actor died on June 20.

Mr. Binag said they will look possible violations of OSH standards on the set at the time of Mr. Garcia’s accident.

“We will conduct a fact-finding on the real cause of the incident for us to come up with a conclusion. We have already created a body to help us find the facts and hopefully soon we can come up with it,” he said. “In the investigation, we can determine how many violations have existed during the time of the incident.”

Mr. Binag said he saw a video of Mr. Garcia’s accident and observed some signs of noncompliance with the OSH law.

Na-observe namin (We observed) through the video (that) obviously, there was no first aid involved in the incident. Second, I think wala silang (they don’t have) medical supplies and equipment like stretchers kasi nakita natin na binuhat lang siya (because we saw that he was being lifted [by people on set]). Obviously, hindi sila nasunod sa (they didn’t follow the) standard when it comes to provision of safety officers and provision of first aid and medical supplies and health equipment,” he said.

When an accident happens within the workplace in which a death or injury has occurred, employers are required to submit a report to the DoLE within 48 hours or two days since the incident happened. — Gillian M. Cortez

FWD Group in talks to buy MetLife Hong Kong

FWD GROUP is in advanced talks to buy MetLife Inc.’s Hong Kong insurance unit in what would be the latest in a string of acquisitions by the insurer backed by billionaire Richard Li, people familiar with the matter said.

The companies could reach an agreement in the next few weeks, the people said, asking not to be identified because the discussions are private. A deal could value MetLife Hong Kong at less than $400 million and would help FWD boost its presence in the former British colony, the people said.

At that price, MetLife would sell the asset for less than its $400 million embedded value, a measure of the value of its insurance contracts, when Bloomberg News first reported on the potential sale last year. China has been working to curb demand for Hong Kong insurance products, which are popular with mainland Chinese customers who see them as offshore investments which can help to safeguard their assets and hedge against yuan volatility.

Still, some buyers have been willing to do deals betting on further growth in the industry. An arm of Hong Kong property tycoon Henry Cheng’s New World Development Co. agreed to acquire FTLife Insurance Co. for HK$21.5 billion ($2.75 billion) in December. In 2017, Hong Kong-based investment fund Jeneration Holdings Ltd. agreed to buy Axa SA’s local wealth management unit.

Talks over MetLife Hong Kong are ongoing and could still fall apart, the people said. Representatives for FWD and New York-based MetLife declined to comment.

MetLife’s Asia business saw adjusted earnings increase 9% in the first quarter thanks to growth in South Korea and China. The company said in May it also recorded strong momentum during the period in Japan, where it’s focused on accident and health coverage as well as foreign-exchange products. The company also has operations in Australia, Bangladesh, India, Malaysia, Nepal and Vietnam.

FWD has been buying insurance assets across Asia, agreeing in October to acquire control of Commonwealth Bank of Australia’s Indonesian life insurance arm. In 2017, it purchased American International Group Inc.’s Japanese life unit, after earlier doing deals in Singapore and Vietnam.

Earlier this year, FWD reached a preliminary pact with Siam Commercial Bank Pcl on a potential life-insurance partnership. Siam Commercial, Thailand’s biggest listed lender by assets, had unsuccessfully explored a sale of its life insurance business back in 2017. — Bloomberg

BoJ debated cost of easing in clarifying rate guidance

BANK OF JAPAN — WIKIPEDIA.ORG

TOKYO — Bank of Japan (BoJ) policy makers debated the need to be vigilant over the rising cost of prolonged monetary easing when they adopted in April a pledge to keep ultra-low interest rates for at least a year, minutes of their rate review showed.

The increasing awareness of the risks of its policy underscores the challenge the BoJ would face if it were to ramp up an already massive stimulus program to battle the next recession.

At the April meeting, the BoJ kept monetary policy steady but clarified its forward guidance — or its pledge on the future path of monetary policy — to say it will maintain the current low rates “at least until the spring of 2020.”

The decision was driven by heightening global economic uncertainties and projected delays in hitting the BoJ’s elusive 2% inflation target, the minutes showed on Tuesday.

“The BoJ must be more vigilant than before to the side-effects of its policy on financial institutions and markets as it maintains the current ultra-easy policy,” one member was quoted as saying at the April meeting.

The same member also stressed the importance of maintaining a mix of fiscal and monetary policies to help stimulate the economy, the minutes showed.

In deliberations on the outlook for monetary policy, one member went further to say additional declines in interest rates could do more harm than good to the economy, the minutes showed.

“It was becoming increasingly necessary to carefully balance the effects and side-effects of our policy,” the member was quoted as saying.

“There was a possibility a further decline in interest rates would result in a greater risk of inducing side-effects on the economy, rather than positive effects” especially as low rates crunch financial institutions’ margins, the member said.

Years of heavy money printing have failed to fire up inflation to the BoJ’s target and left it with little ammunition to fight the next recession.

Prolonged easing has also added to stresses on regional banks, already facing slumping profits due to an ageing population and an exodus of borrowers to big cities.

Underscoring the rift within the nine-member board over the policy outlook, some members saw room and the potential need to expand stimulus given weak inflation and rising risks to Japan’s economy.

One board member said the BoJ should “flexibly and decisively” expand stimulus if the economy loses momentum for achieving the bank’s 2% inflation target, the minutes showed. — Reuters

Ferrari dealer in search of local partner for Davao branch

DAVAO CITY — Autostrada Motore, Inc., the official dealer of Ferrari cars in the Philippines, is looking for a local partner for its planned Davao distribution that is targeted by next year.

Ginia R. Domingo, managing director of Autostrada, said they want a partner that not only has financial capacity but a commitment to the brand.

“For a partner, you have to have a showroom and a facility for after-sales and warehouse for your cars. This is very common, but it needs a bigger investment because we have more expensive cars… If it’s a very high cost item it requires heavy capitalization… and I think more than the monetary investment is really the commitment to the brand,” Ms. Domingo said in an interview.

Last week, Autostrada brought and showcased four cars — one Ferrari Portofino and three Maserati — in Davao City, with the participants of the Davao Investment Conference 2019 among those invited to the event.

“We have a very warm welcome from the local community in Davao… We are so happy with the response… especially that it is our first time in Davao,” Ms. Domingo said.

Apart from Davao, she said they see a big potential for the automotive industry in the Mindanao market.

“The local business here has been doing pretty well,” she said.

In terms of sales, Ms. Domingo said one car per month is considered “good.”

“That is how specialized the market is. So one a month is 12 cars in a year, so when we get to 24, it’s really good. So far we are on track.”

Autostrada’s marketing campaign in Davao will be focusing more on the Maserati.

“The Maserati is a little easier to acquire because that, we have an inventory. The inventory is like a normal car sale. If we don’t have the preferred color then you wait for awhile, but otherwise it’s readily more available compared to a Ferrari,” Ms. Domingo said. — Maya M. Padillo

Gay Art Auctions: Does the label help or hurt an artist’s market?

AS PART of a commemoration of Gay Pride Month and the 50th anniversary of the Stonewall Riots, Swann Auction Galleries held its first ever Pride Sale on Thursday in New York.

The sale included a letter from Frederick the Great that sold for $281, a binder of 100 photos of “hunky bodybuilders” from the 1960s that sold for $1,875, and a photograph of the artist David Wojnarowicz by Peter Hujar that carried a high estimate of $25,000 and sold for $106,250, which is more than double Hujar’s previous auction record.

“We’re very delighted to have an event that gets more people through the doors,” says Nicholas Lowry, Swann’s president and principal auctioneer. “The auction market is not a big market, and if we can expose what we do to more people, that’s a win for us.”

Next is an auction at Sotheby’s New York called Bent (“because progress is never a straight line”) on June 27, which is “in recognition of what is believed to be the largest international LGBTQ pride celebration.”

That 117-lot sale includes an Andy Warhol silkscreen of a man’s groin, estimated from $90,000 to $120,000, Horace Bristol’s famous photograph of a naked marine manning a machine gun in World War II (estimate: $10,000 to $15,000,) and a painting by Martin Wong of a “Hispanic youth,” estimated from $5,000 to $7,000.

Following that is an online-only photo auction at Bonham’s titled Stonewall@50 that runs from June 27 to July 10 and contains over 130 lots, including work by Herb Ritts, Annie Leibovitz, and Nan Goldin.

ART VS. GAY ART
There have always been LGBTQ artists, of course, and there has always been art that represented queer themes. But until now, major auction houses hadn’t grouped these works into a single category.

“Look at our top-performing artists — Andy Warhol, Francis Bacon, Jasper Johns, Robert Rauschenberg, David Hockney — so many of the moneymakers in [the contemporary art] department are queer artists,” says Harrison Tenzer, a contemporary art specialist at Sotheby’s who helped organized the Bent sale. “But so many of those artists were successful despite being gay.”

By putting gay artists’ work in a Gay Art category, auction houses are following in the industry’s well-worn tradition of grouping seemingly disparate artworks into fairly arbitrary categories in order to sell them. Sotheby’s forthcoming Ancient Sculpture and Works of Art sale in London, for instance, includes artifacts from around the world that were made thousands of years apart.

“I think the calculus is that it’s June [a historically slow month for auctions], and it’s Stonewall’s 50th anniversary, and auction houses will do anything to get material,” says Wendy Olsoff, the co-founder of the Chelsea gallery P.P.O.W., which helped build the careers of Wojnarowicz, Wong, and other cornerstones of the contemporary queer canon. “If it was Old Women Pride Month right now, they’d have that show instead.”

But the move is also in keeping with a programmatic approach that’s recently been embraced by galleries, curators, and museums — and deep-pocketed collectors — wherein the racial, sexual, and even geographic background of the artist is nearly as important as the art.

“A lot of institutions are trying to balance their collections now and try to be more inclusive to minority artists and artists from different cultures,” says dealer Keith de Lellis, whose gallery recently staged a show of work by George Platt Lynes, a photographer who chronicled New York’s gay avant-garde from the 1930s until his death in 1955.

“I don’t know whether some of these artists would appreciate being labeled ‘gay artists,’ but there are some artists that make art that is more in tune with gay culture, and there are others that make more general art.”

MARKET IMPACT
The question is whether this new method of categorization will help or hurt artists’ markets.

Warhol, Hockney, and Johns didn’t do much to hide their homosexuality, but their art was rarely, if ever, categorized by their sexual preference.

“It’s like, ‘What do you mean, ‘gay art,’ that doesn’t mean anything to me,” says Tom Gitterman, whose 57th Street gallery put on a major exhibition of the group known as PaJaMa, which chronicled a dreamy, queer utopia on Fire Island, N.Y., Provincetown, Mass., and Nantucket, Mass., from the late 1930s to the early 1950s. “It’s either good art or it’s not.”

(A group of 10 photographs by PaJaMa is included in the Sotheby’s sale, with an estimate of $15,000 to $25,000.)

Suddenly categorizing Andy Warhol as a “gay artist” might not put a dent in his multibillion-dollar market, but there are other, less famous artists for whom that designation could have more impact.

“The two best shows we’ve had in terms of selling were the PaJaMa show and the George Platt Lynes show,” says de Lellis. “A lot of the buyers were museums that wanted to broaden their collection to include artists that were gay.”

When he first started buying works by Platt Lynes, “Pictures were under a thousand dollars,” de Lellis says. “Now they’re $5,000 for a print, and some people say that even that price is low.”

FIRST OF MANY
Indeed, there seems to be a consensus that works by mainstream artists included in the auctions will remain totally unaffected; the same goes for artists whose work has always dealt with explicitly queer themes. “I don’t think the whole thing hurts David [Wojnarowicz]’s market,” says Olsoff. “The only way it could hurt is if the works do badly.”

Only the lesser-known artists in the auctions might benefit from the association. “I don’t think this sale is necessarily going to be a big market-breaker for anyone,” says Tenzer. “But it can increase visibility for someone like Luis Frangella, whose art is explicitly queer.”

Tenzer says that Sotheby’s LGBTQ-themed sale is something of a trial run. If it does well, it could serve as a template for more sales in the future. “To be quite honest, it’s sort of an exciting experiment,” he says. “Based on the results, it will point us in some different directions.”

Swann’s Lowry says that he’s already planning the next one. “This is not a one-off sale, where we hang a rainbow flag in the window like Adidas and McDonald’s and then go home,” he says. “We’re hoping this becomes a yearly event.” — Bloomberg

Before the Europeans came

By Jonathan Best

Book Review
Empire of the Winds: The Global Role
of Asia’s Great Archipelago
By Philip Bowring

LAST MARCH, the Philippine Map Collector’s Society (PHIMCOS) invited the distinguished journalist and editor Philip Bowring to give a talk to our group in Manila and launch his new book Empire of the Winds. Bowring is a professional journalist and former editor of the Far Eastern Economic Review and has been based in Asia for over 45 years. His book is not specifically about maps but he is an expert on historical maritime trade routes, seasonal winds, currents and the ancient sailing ships which navigated between the thousands of islands which make up Southeast Asia’s southern archipelago. These ships were built locally and were capable of sailing west as far as India and East Africa and north to Vietnam, the Philippines, Taiwan and China. The history of navigation and trade routes is of great interest to map collectors as it goes hand-in-hand with the early development of Asian maps, navigational guides and sea charts.

Bowring specifically concentrates on the islands which make up modern Indonesia and the surrounding coastal waters to the north and west along the Straits of Melaka and coastal Malaysia, Thailand, Vietnam, and the Philippines to the east. He refers to this area as Nusantaria, a distinct cultural region which developed its own maritime technology, trade routes and civilization considerably more than a thousand years before European powers overran the region in the early 16th century. The Europeans later referred to this archipelago and it adjacent trading ports as the East Indies or “Spice Islands” as they were the source of most of the priceless spices, medicinal plants and aromatic woods the Europeans coveted.

Although the Philippine archipelago was on the periphery of this region, it was an integral part of it and unquestionably heavily influenced by the ebb and flow of languages, religions, political systems, and cultural practices which were steadily evolving and changing throughout the region. Over the centuries some of these influences developed locally while others were brought in by foreign traders and missionaries gradually over time. It was not until the arrival of the Spanish colonizers with their missionaries that the Philippines was politically and culturally cut off from its Asian neighbors. Even this enforced isolation was not complete as the Sultanate of Sulu and the Badjao sea gypsies have continued to trade and interact with their Malayan neighbors up to the present day.

For this book Philip Bowring has methodically organized thousands of scholarly documents and historical anecdotes covering a vast stretch of time and an exceptionally complex geographical area. The great challenge involved in writing a history of this tropical region is that so little primary source material has survived the passage of time. Structures of wood, fabrics, and documents on parchment or paper rarely survived more than a few generations in the humid tropical climate or the periodic wars and piratical raiding which plagued the emerging city states. Only a few great stone monuments remain such as Angkor Wat, Borobudur, and Prambanan as landmarks of the major centers of civilization which once thrived around them with populations of hundreds of thousands and political influence extending throughout Southeast Asia. Little remains of Champa or the Cham civilization which for centuries dominated the coast of Southern Vietnam and was a major entrepôt for the Chinese coastal trade and had direct trade links with the Philippines through Borneo and the Sulu Sea more than a thousand years ago.

A few obscure mentions of the area start appearing in classical European histories after the turn of the first millennium such as in Pliny the Elder and Ptolemy in the first centuries of this era, but the citations are fragmentary and quite vague. Southeast Asian spices were being imported to Egypt and the Roman Empire through India and the Middle East at this time, while occasional Roman coins have been found in Southeast Asian excavations. Better documentation exists of the early contacts and influences coming from India and Sri Lanka in the first millennium. Local ships built in Nusantaria were large enough to travel west all the way to India and the coast of Africa and Indian traders brought in Hinduism, Buddhism, Indic scrip and their distinct class system governed by dynastic, indigenous Rajahs and their families. These influences mixed with the already well developed Austronesian local cultures.

Bowring has uncovered other important sources of historical information in the official Chinese histories of the Tang (7th century), Sung, and later dynasties when the Chinese became more active in the region. Buddhism was spreading rapidly through the archipelagoes and to trading ports along the Thai and Vietnamese coasts coming mainly from India and Sri Lanka. Chinese monks were actually coming south to study in Buddhist centers in Srivijaya. At the time, the Nusantarian ocean-going ships were larger than the those of the Chinese and could make a trip from Guangzhou in southern China to Sumatra in less than three weeks.

Over the last few years, marine archeology has also been a very important source of information for Southeast Asian historians as many wrecks of trading vessels have been found in Philippine waters and throughout East and Southeast Asia. These discoveries have shed light on the flourishing trade routes throughout the region. Ceramics, silk, and luxury goods from China were traded and exchanged as tribute for spices, medicinal plants, edible birds nests, gold, other metals such as tin and copper, and for tropical hardwoods such as mahogany. Slaves were also an important export commodity from Nusantaria, supplying laborers and servants both locally and to distant port. Undoubtedly Filipinos captives were transported to foreign lands, some many actually have prospered and returned to the Philippines. As Bowring points out, the slave trade in Asia was not as brutal as the race based system exploiting black Africans in Europe and the Americas. Ferdinand Magellan’s translator Enrique, whom he acquired in Malacca, may very well have been a Filipino.

Bowring writes extensively on the two great island empires that developed in Nusantaria, first on Sumatra and then on Java. Both were the result of consolidating and controlling the local trade routes. By the late 7th century, the Srivijaya Empire had its capital at Palembang on the Musi River in southern Sumatra and was able to control the trade moving through the strategic Straits of Melaka, the main passage for goods flowing back and forth from China and Southeast Asia to India and beyond. Some centuries later, the center of power moved southeast to Java near what is now modern Surabaya. The wealthy and cosmopolitan empire of Majapahit dominated Nusantaria during the 15th century with its control of maritime trade and a rich source of agricultural produce from the fertile central Javanese plains. Its tributary states reached all the way to north eastern Mindanao and the Sulu archipelago. The remnants of its Hindu culture can still be found on the island of Bali.

Philip Bowring does not end his history with the fall of the Majapahit Empire on Java in the 15th Century. He continues to record the fierce competition between the various Southeast Asian trading ports and the steady advance of foreign powers in the region. The introduction of Islam which came via India and traders from Arabic countries had a major influence. Although not as puritanical as the Wahhabi Islam of today, this new religion fundamentally changed the culture of the Nusantarian archipelago. Soon after Islam, the Europeans began to arrive no longer just as traders but also bent on political and military domination as well. By the 17th century, Nusantaria lost its political and cultural independence under this invasion. The central and northern Philippines was cut off from its southern neighbors and dominated by Western colonizers for over 400 years.

In order to cover as much disparate information as possible without overwhelming the reader, Bowring has arranged his book as a series of 27 short chapters. This makes it possible for him to focus on specific events or cultural phenomenon and then move on quickly to the next. If he had attempted to write a comprehensive history of Nusantaria and its neighbors linking all the narratives together, he would have had to fill five volumes at least.

Bowring touches briefly on a wide variety of subjects not just the history of maritime trade. The book is full of fascinating anecdotes and fragments of information regarding the indigenous cultures of the region and the foreign influences which swept through, changing, sometimes enriching, sometimes destroying everything from religious practices to indigenous architecture, cuisine, sexual mores, marriage, and social institutions. In many ways his book is a lively introduction to the history of the region, leaving the reader eager to read more and study what has been a seriously neglected chapter in world history.

For Filipino readers especially, Bowring’s book will be a valuable introduction to the long and complicated relationship the Philippines has had with its Asian neighbors, starting long before it was ostensibly “discovered” by the Spanish in 1521. It will be an excellent addition to college level history classes studying the historical role of the Philippines in Southeast Asia. The book is very well annotated and Bowring provides an index and lengthy, nine page bibliography of books and scholarly articles relating to regional history.

Empire of the Winds is published by I. B. Tauris & Co., London-New York 2019. It is fully illustrated with color and black-and-white photos plates, 16 maps, and 317 pages with extensive bibliography and notes. It can be ordered online through Amazon, Abe Books (https://www.abebooks.com/), or directly from the publisher (www.ibtauris.com).

PHL urged to use fintech to lower remittance costs

THE PHILIPPINES must take steps to make remittances more efficient, even as financial technology has improved in the country, money transfer solutions company Ripple said.

“It is not advanced. It doesn’t take advantage of the technologies,” Eric van Miltenburg, Senior Vice-President of Global Operations at Ripple, said in a phone interview.

Mr. Miltenburg noted the slow transfer time of remittances from one country to the Philippines and the costs related to these transactions.

“It’s taking several days, the costs are significant,” Mr. Miltenburg said, noting that remittances in the country would cost around 7% of every $200 sent. “That system is very broken. Leverage your technology and provide alternative technology, banks and non-banks.”

He however noted that the country is capable of making such improvements given the increasing number of financial institutions offering technology services for remittances, citing Cebuana Lhuillier as one of its partners here in the country.

He added that Ripple is also working with a local bank, but stopped short of disclosing details.

“We’re seeing a significant demand in ASEAN and the Philippines… Over time, we will see more,” he said.

Mr. Miltenburg said he appreciates the Bangko Sentral ng Pilipinas (BSP) for its ”progressive thinking” on fintech and hopes to engage more with regulators both in the Philippines and in different parts of the globe.

He noted that it is important that the government understands the importance of financial technology, especially as remittances provide a boost to household consumption, which is around 10% of the country’s gross domestic product (GDP).

“It is not the technology that is the challenge but how we use it. The Philippines is one of the countries where the regulators are fast-forward. We’re optimistic,” Mr. Miltenburg said, noting that financial technology in the country “is in the process of being upgraded.”

“The pace of growth in the Philippines will continue… We will double the size of our office and that’s reflective of the demand and activity in the region,” he said.

CRYPTOCURRENCY
Meanwhile, Mr. Miltenburg said there is a need to use blockchain technology, specially cryptocurrencies, to facilitate faster remittances between countries.

Currently, Ripple uses XRP, a type of cryptocurrency which the company claims to be cost-efficient for cross-border transactions.

Asked if the use of cryptocurrencies would not put overseas Filipino workers and their remittance recipients at risk of losing the money due to volatility, Mr. Miltenburg said there will be minimal risk since it only takes seconds to complete the transaction.

“Volatility exists across all the coins. The volatility is relatively modest. XRP to peso, the amount of exposure is seconds, very minimal. Much more volatility in PHP to USD in three days than XRP,” Mr. Miltenburg said.

“We’re quite bullish on how cryptocurrency can play a great role here,” he said. — Reicelene Joy N. Ignacio