A piece of Venice Biennale’s PHL Pavilion comes home to Manila

June 19, 2019 | 12:03 am

ARTIST Manuel Ocampo stands next to one of his pieces during the opening of the restaged *The Spectre of Comparison* exhibit at MCAD.

A PART of the exhibit which made up the Philippine Pavilion at the 57^th International Art Exhibition of La Biennale di Venezia in Venice, Italy, can now be seen in Manila, at the Museum of Contemporary Art and Design (MCAD), where it is on view until July 20.

The Spectre of Comparison features the works of two Filipino artists, Lani Maestro and Manuel Ocampo. The exhibit was inspired by the Spanish line “el demonio de las comparaciones (the demon of comparisons),” from the revolutionary novel Noli Me Tangere by the National Hero Jose Rizal, which summarized the experience of the novelist’s protagonist, Crisostomo Ibarra, as he gazed at the Botanical Garden of Manila while simultaneously fondly remembering the gardens of Europe.

The exhibit delves on the tainted viewpoints when one cannot help but juxtapose two different geographical areas.

Though both Maestro and Ocampo have resided abroad for years, they have maintained active personal engagements with the Philippines throughout their careers.

MCAD Director Joselina “Yeyey” Cruz, curator of this particular exhibit, said that mounting the exhibition is a big challenge. “It’s difficult to bring a whole exhibition to a different place and expect it to be the same when the venue and the context has hanged. Still, the team did its best to recreate an experience close to the original.”

The Museum of Contemporary Art and Design is located at the De La Salle-College of Saint Benilde School of Design and Arts (SDA) Campus, Dominga St., Malate, Manila.

PNB sets final terms for rights offer

June 19, 2019 | 12:03 am

PHILIPPINE NATIONAL Bank (PNB) has set the final terms for its stock rights offer (SRO) where it is looking to raise up to P12 billion to fund asset growth.

The Tan-owned PNB said in a disclosure to the local bourse on Tuesday it will offer 276.63 million common shares under the plan priced at P43.38 apiece, a 13.41% discount from its Tuesday close of P50.10 each.

The final number of shares on offer is lower than the bank’s initial plan to sell up to 300 million shares.

The offer will be conducted from July 3 to 12.

Eligible shareholders are entitled to subscribe to a share for every 4.516 common shares as of the June 21 record date. Ex-date was yesterday.

PNB said proceeds of the fund-raising activity will be used to fund the asset growth of the bank.

Apart from the SRO, PNB is also set to raise about $2 billion via euro medium-term note (MTN) program, double than the initial $1 billion announced.

The lender established its euro note program in April last year. During that month, it allocated $300 million in proceeds from the program to support its dollar lending.

In May, the lender said it wants to raise another $300 million in fresh funds through the MTN program.

PNB booked a net profit of P1.9 billion in the first quarter, up 30% from the same period last year.

The bank’s closing price yesterday was down P1.95 or 3.75% from Monday’s finish. — KANV

Cebu Pacific orders 31 Airbus jets worth $6 billion

June 19, 2019 | 12:02 am

LE BOURGET — Airbus struck a $6-billion plane deal with Philippines budget airline operator Cebu Air on Tuesday, extending its lead on orders at a subdued Paris Air Show as rival Boeing struggles following the grounding of its top-selling jet.

Cebu’s order included 10 of Airbus’s new long-range A321XLR passenger aircraft, which was launched at the show on Monday, as well as 16 wide-body A330neos and five single-aisle A320neos.

Reuters reported on Monday that Cebu Air, which operates Cebu Pacific, was poised to buy more than two dozen Airbus planes.

Sources familiar with the matter say American Airlines and leasing giant GECAS are also in talks to buy the A321XLR, which aims to carve out new routes for airlines with smaller planes and steal a march on Boeing’s plans for a potential all-new mid-market jet, the NMA.

Airbus shares were up 1.2% at 0800 GMT, at a record high of 126.48 euros.

Despite the flurry of activity around the A321XLR, however, dealmaking at the aerospace industry’s biggest annual event has been quieter than normal, fueling speculation that a decade-long boom in orders might be coming to an end.

With airlines struggling with over-capacity, slowing economies and geopolitical tensions, some analysts warn Airbus and Boeing could face a growing number of cancellations from their bulging order books.

Boeing in particular is suffering after the grounding of its MAX 737 aircraft in March following two deadly crashes.

However, the planemakers are confident of continued strong demand for more fuel-efficient planes as emissions regulations tighten and as air travel continues to rise, driven by Asia’s growing middle classes. Boeing on Monday increased its 20-year industry demand forecast.

“Although investors have started to ask questions about the state of the upcycle, the aerospace industry remains very confident in the current state of the market,” analysts at Vertical Research Partners said in a note.

Cebu Air Chief Financial Officer Andrew Huang told a news conference the 16 A330neo jets it was buying would have up to 460 seats, allowing the airline to add new international routes.

Cebu Air, which operates the Cebu Pacific brand, had a 51% share of the Philippine domestic market in 2018, according to company data. In the international market, its 19% share was second only to full-service rival Philippine Airlines with 28%.

After announcing no major aircraft orders on Monday, Boeing could unveil some on Tuesday, including a potential deal with Air Lease Corp. whose founder Steven Udvar-Hazy told reporters on Monday he would be “at Boeing tomorrow.” — Reuters

Bond traders dust off crisis playbook, fire up best quantitative easing trades

June 19, 2019 | 12:02 am

BOND INVESTORS are preparing for another wave of quantitative easing (QE) from the European Central Bank (ECB) by returning to some of their favorite post-crisis trades.

First up: buy the debt of nations such as France that have greater scope for purchases by the ECB. Next, bet on a drop in longer-maturity yields relative to near-term rates. Then go for the region’s higher-returning bonds, like Spain.

Some of the favored ECB QE restart trades already beginning to work

While fund managers are not expecting any immediate move by the ECB, many are factoring in action to stimulate the region’s flagging economy this year. The global trade conflict and record-low inflation expectations have turned money markets to price in rate cuts by 2020. Since the ECB has kept deposit rates negative, policy makers might be more inclined to re-visit QE first.

“I would expect further rate cuts, QE, a further extension of forward guidance,” said Russell Silberston, a fund manager at Investec Asset Management, which oversees $133.7 billion. “At the broadest level we like anything that benefits from lower for longer, so yield curve flatteners for example.”

ECB President Mario Draghi said at the bank’s last policy meeting that there is “considerable headroom on QE.” Other officials have since reinforced the message. Bank of Finland Governor Olli Rehn, a candidate to replace Draghi this year, tweeted the ECB has “gotta do what’s gotta do, as needed.”

In the last round of QE following the financial crisis, the ECB hovered up €2.6 trillion of debt from 2015 to the time they called it quits at the end of 2018. That insulated markets from risk and led to winning bets for funds buying German, French and Italian debt, which were among the biggest beneficiaries of the program and saw yields fall to historic lows.

The debt of nations with more longer-term securities that the ECB could still buy — such as France — are now outperforming in the latest rally. That’s because, with the ECB only taking bonds yielding more than its minus 0.4% deposit rate, those have become scarcer. It is also pushing long-dated yields down faster.

FLATTENING CURVES
The flattening of yield curves “has much further to run” as the restart of QE was barely factored into markets before the ECB’s last meeting, according to Citigroup’s Jamie Searle in a note entitled “Flatteners, flatteners, flatteners”. He favors trades targeting a fall in Spain’s 30-year yields relative to 10-year bonds.

Investors have been piling into bonds since then, driving yields across the continent to fresh record lows and narrowing premiums over Germany. Danske Bank A/S likes bets on these spreads tightening further as it sees the pressure mounting on the ECB, while Rabobank’s head of rates strategy Richard McGuire recommends traders buy 30-year Belgian bonds versus Germany.

Others favor Italy, which has plenty of debt for the ECB to soak up. While Italian bonds have been weighed down by political risk in the past year, they “would be the clearest long in Europe” if QE were to restart, according to NatWest Market’s Giles Gale. He recommends five-year Italian debt against Germany.

SCARCITY TRADES
A restart of QE is far from set in stone as the ECB may need to see more signs of an economic slowdown in the second half of the year to act. Any easing of trade tensions could scupper trades placed too soon, while a revival of inflation expectations could also curb the market speculation.

“The macro picture is not bad enough yet to prompt more easing, but there has clearly been a shift in focus towards downside risks to growth and Draghi is prepping the market for more stimulus if things do get worse,” said Joubeen Hurren, a money manager at Aviva Investors. “Curves can still flatten.”

Restarting bond buying wouldn’t be without its hurdles either. The ECB is currently only allowed to buy 33% of the total stock of a given nation’s bond and it is already at that level in Germany, and close in the Netherlands, according to Citigroup Inc. By comparison, the bank estimates it has France and Italy at around 20%.

This issue of scarcity is leading some investors to buy bunds versus interest-rate swaps, which the ECB would be unlikely to buy. This trade could also serve as a hedge against turmoil, such as a flare up in Italian political risk, with the bonds outperforming from a flight to safety. Bank of America Merrill Lynch’s Sphia Salim favors buying 30-year German bonds against interest-rate swaps.

“We like owning shorter-dated bonds in Germany and also in European swaps,” said Grant Peterkin, a senior managing director at Manulife’s Absolute Return Rates Fund. “We still feel there is value in a world where inflation expectations continue to be muted and some form of stimulus will be needed to reflate the global economy.” — Bloomberg

Tiny bulletproof vests centerpiece of New York art exhibit on school shootings

June 19, 2019 | 12:02 am

NEW YORK — Rows of tiny bullet-proof vests hang on clothing racks and “safety defense” lunchboxes adorn the walls. It looks like an apparel store — almost.

But the Back to School Shopping art installation by the artist WhIsBe is a commentary on US mass school shootings, intended to raise the question: How long before life imitates art?

The child-sized bulletproof vests are adorned with cartoon characters Pikachu, Care Bears, and Teenage Mutant Ninja Turtles, while the lunch boxes are filled with replica guns, Tasers, and brass knuckles. The exhibit, in warehouse-style space in the heart of Manhattan’s Chelsea neighborhood, also features a game arcade claw machine filled with brightly colored cap guns.

The artist, whose nom de plume WhIsBe stands for “What is Beauty,” is aiming for a gut-punching reaction to an exhibit that he hopes will spur action to combat school shootings.

“The reactions are full spectrum from shock to upset to being angry, but not angry at what I’m doing, angry at the stark fact that this could be a reality,” the artist, who does not reveal his real name, said in an interview on Monday.

US schools have been rocked by a steady stream of shootings in the nearly two decades since the Columbine High School massacre that killed 13 people in 1999. A growing national campaign by young people to tackle gun violence and toughen laws on firearms sales has turned up the volume of the debate over guns in America, where the right to bear arms is protected under the Second Amendment of the Constitution.

Since 1970, there have been more than 1,300 incidents of gun violence at schools in the United States, according to the K-12 School Shooting Database maintained by the Naval Postgraduate School’s Center for Homeland Defense and Security.

The art exhibit, located in the Starrett-Lehigh Building in Chelsea, runs through June 30.

“I’m hoping that people are going to experience a different visceral reaction that will maybe change their thoughts about the matter into provoking them into action,” WhIsBe said. — Reuters

Which have (un)favorable trade balances?

June 19, 2019 | 12:01 am

CTA upholds dismissal of Hedcor’s tax refund claim

June 19, 2019 | 12:01 am

THE Court of Tax Appeals (CTA) affirmed the dismissal of the P10.6-million tax refund claim of Hedcor, Inc. for lack of jurisdiction.

In a 13-page decision dated June 10, the CTA sitting en banc denied the petition of Hedcor, saying it failed to file in time its judicial claim for refund or issuance of tax credit certificate over alleged input value-added tax (VAT) paid and incurred from the domestic purchases of goods and services mostly attributable to zero-rated sales of electricity for the third quarter of 2006.

“In fine, Hedcor’s judicial claim cannot prosper for its failure to comply with the 30-day mandatory and jurisdictional period set forth by law,” the CTA ruled.

The CTA noted that the hydropower generation company filed its administrative claim with the Bureau of Internal Revenue (BIR) on Aug. 20, 2008 and completed submission of documents on Nov. 12, 2008.

Since no action or decision was given by the BIR after 120 days on March 12, 2009, as stated in the Tax Code, Hedcor had 30 days or until April 11, 2009 to file to the CTA.

Hedcor, however, only filed its petition for review to the CTA on Dec. 10, 2015.

Under Section 112(C) of the National Internal Revenue Code of 1997, the commissioner of BIR shall grant or deny a refund or issue a tax credit certificate within 120 days from the submission of complete documents. In case of full or partial denial or inaction from the part of the bureau, a taxpayer has 30 days to file the claim to the CTA.

The CTA also cited various decisions by the Supreme Court which stated that the 120+30 day periods in the Tax Code are “mandatory and jurisdictional.”

The tax court also denied the claim of Hedcor that the 30-day-period for the filing in the CTA started from the date of its receipt of the alleged denial of its claim from the BIR on Nov. 10, 2015.

“Applying the plain meaning of the words in the said resolution-letter, it is clear that there is no express denial of the claim,” the court said.

“In this case, considering that there is no actual denial of the claim, it should be treated as inaction. Hedcor’s allegation that its claim was acted upon and expressly denied precluding the application of the ‘deemed denial’ doctrine, is, therefore, bereft of merit,” it added.

The court also said the contention of Hedcor that the CTA in division erred in applying the provisions of Revenue Memorandum Circular No. 54-2014, which required complete submission of documents for claims at the time the claim was filed, is “bereft of merit” as the circular was not mentioned or discussed.

It also said Hedcor’s allegation on issue of prescription of period to appeal requires full-blown trial is “untenable.”

The CTA First Division on Dec. 22, 2016 granted the motion of the BIR for the early resolution on the issue of jurisdiction and dismissed the petition for lack of jurisdiction. The court in Nov. 2017 denied for lack of merit the motion for reconsideration of Hedcor.

The decision was penned by Associate Justice Juanito C. Castañeda, Jr.

Hedcor is Aboitiz Power Corp.’s run-of-river hydropower arm. — Vann Marlo M. Villegas

Art & Culture (06/19/19)

June 19, 2019 | 12:01 am

Sweeney Todd tickets out

LEA SALONGA and Jett Pangan star in Sweeney Todd.

AN UNJUSTLY exiled barber, Sweeney Todd, returns to 19^th century London seeking vengeance. His revenge leads him to Mrs. Lovett, a resourceful proprietress of a failing pie shop. Sweeney Todd opens a new barber practice and Mrs. Lovett’s luck sharply shifts. Londoners start lining up for her pies — and the carnage has only just begun. Starring Tony and Olivier-winning actress Lea Salonga as Mrs. Lovett and rock icon Jett Pangan in the titular role, Sweeney Todd: The Demon Barber of Fleet Street will run at the Theater at Solaire, Pasay City from Oct. 11 to 27. This year marks to 40^th anniversary of the musical, having first opened on Broadway in 1979. Tickets are now on sale at TicketWorld (891-9999, www.ticketworld.com.ph).

Poklong Anading solo show

1335MABINI presents the next solo exhibit of 1335MABINI-represented artist Poklong Anading called Current. It will run from June 22 to Aug. 3. Anading’s spectrum of work ranges from video, installation, photography, drawing and painting. This exhibit centers around a series he started during his final phase at art school: Line Drawing — a process-oriented project with each iteration starting as a series of horizontal lines drawn onto a surface. While walking and drawing the lines with one hand, the other hand video-tapes the lines being drawn. The camera thus records what is in effect a performance and at the same time functions as a drawing tool just like the pencil. The resulting video becomes not only a video work but also a virtual drawing. The exhibition will be at 1335MABINI, Karrivin Plaza, Chino Roces Ave. Ext., Makati.

Film on artist Manuel Ocampo

DISCOVER the internal workings of the international art scene in the world of the elite as told through the lens of a Filipino artist based in America in Manuel Ocampo: God is My Co-pilot, which is set to be screened on June 21, 3 p.m., at the Multimedia Room of the Museum of Contemporary Art and Design (MCAD) of the De La Salle-College of Saint Benilde. Directed by award-winning filmmaker Phillip Rodriguez, the film narrates the career of a 33-year-old painter who was thrust into the global arena during a time when multiculturalism was at the forefront of discussion. The documentary has been in the official selections of the AFI International Film Festival, Hawaii International Film Festival, International Festival of New Latin American Cinema in Havana, the Centre Georges Pompidou Biennale internationale du film sur l’art, the Museum of Contemporary Art Los Angeles, Arco in Madrid, San Francisco International Asian American Film Festival, Los Angeles Asian American Film Festival, and the Chicago Asian American Showcase at the Chicago Art Institute. The Museum of Contemporary Art and Design is located at the De La Salle-College of Saint Benilde School of Design and Arts Campus, Dominga Street, Malate, Manila.

Arte Autismo art and photo exhibit

ARTE Autismo Filipino celebrate the strengths of its featured artists in an exhibit which opened on June 3 at The Globe Tower, Basement 1, The Globe Art Gallery in BGC. Among the artists whose works are on view are Julyan Harrison, Nina Bantoto, Vico Cham, Chico Joaquin, Samantha Kaspar, and Daniel Sanchez, all of whom are autistic. Julyan Coffee Spot, a coffee shop in Zambawood luxury resort in San Narciso, Zambales which offers employment to PWDs, is named after Julyan Harrison. Julyan Coffee Spot will be opening three branches in Metro Manila this year: at The Globe Tower BGC (June), Palma Street in Poblacion, Makati (July), and Maysilo Circle, Mandaluyong City.

Exhibits at Kaida

KAIDA Contemporary presents JAPINOYSME, a solo exhibition by Japanese-Filipino artist Taichi Kondo, and Planescapes, a two-man exhibition by Raymond Carlos and Jose Luis Singson. In his second solo exhibition, Kondo draws inspiration from his heritage as both a Japanese and Filipino. In Planescapes, Carlos and Singson present a series of works that seek to understand how memory, imagination, and reality coexist within the plane of consciousness. The exhibits are on view until July 1. Kaida Contemporary is located at 45 Scout Madriñan St., South Triangle, Quezon City.

Ayala Museum’s doll collection

AS PART of the Ayala Museum On-The-Go program, a showcase of 28 handcrafted dolls that represent the development of Philippine clothing will be exhibited in different Ayala Malls throughout the metro. The traveling exhibition — The Evolution of Philippine Costume: The Ayala Museum Doll Collection — kicks of at the Market! Market! Mall in Taguig where it is on view until June 29. The Doll Collection is one of the original permanent exhibitions housed in the old Ayala Museum when it opened in 1974. Each doll was laboriously created in the scale of 1:4 to be able to highlight and dramatize the distinctive features of each of these subcultures, as represented by their set of costumes.

Indonesia seen keeping key rate steady but cutting later this year

June 19, 2019 | 12:01 am

BANK Indonesia will likely keep its key rate steady. — *WIKIPEDIA.ORG/CEPHOTO, UWE ARANAS*

JAKARTA — Bank Indonesia (BI) is expected to keep its benchmark interest rate steady at a policy review on Thursday, but it may begin to follow other Asian central banks by cutting later this year, a Reuters poll showed.

All but three of 22 analysts surveyed predicted Bank Indonesia (BI) will hold the 7-day reverse repurchase rate at 6.0%, where it has been since November.

The other three forecast a trim by 25 basis points (bps), which would be the first rate cut since September, 2017.

A reduction would put BI on the same path as central banks in India, Malaysia and the Philippines who have loosened monetary conditions following the Federal Reserve’s dovish turn.

Hours before BI’s meeting, the Fed, facing fresh demands by US President Donald Trump to cut interest rates, is expected to leave borrowing costs unchanged, but possibly lay the groundwork for a rate cut later this year.

“Now, we believe the stars in the global economic atmosphere are aligned for a BI rate cut,” said Satria Sambijantoro, an economist with Bahana Sekuritas, who is among the minority predicting a cut this week.

He cited even stronger dovish signals from the Fed, prospects of lower oil prices, and a credit rating upgrade from Standard & Poor’s last month as reasons why BI would feel comfortable cutting now.

Most other economists, however, think BI will take time to monitor global markets before cutting.

Trimegah Securities said in a note this week a premature rate cut would hurt the rupiah currency. Anchoring the rupiah was among BI’s main goals behind rate increases last year that increased the policy rate by a total 175 basis points.

“We’ll turn bearish on rupiah and bonds if BI delivers a rate cut too early,” its economist Fakhrul Fulvian said.

Governor Perry Warjiyo in an interview with Reuters last month said that BI will take into consideration global market conditions and Indonesia’s external balance when “considering the room for monetary policy to be more accommodative”.

Warjiyo told Reuters 2019 gross domestic product (GDP) expansion is seen at 5.1%, a fraction below last year’s 5.17% and near the bottom end of BI’s 5.0%-5.4% outlook.

On Monday, the governor told a hearing with parliament he expects global uncertainties to subside in the second half of the year.

Indonesian exports have plunged in recent months as global trade slowed and trade tensions between the United States and China escalated.

At its May 16 policy meeting, BI widened its forecast for the current account gap to 2.5%-3% of GDP this year, from an initial estimate of 2.5%.

All eight respondents who gave a view on the year-end benchmark expect at least one rate cut in 2019. Four predicted the rate would end the year 25 bps below its current level, three saw it 50 bps lower, and one saw the rate 75 bps lower. — Reuters

Car sales pick up in May

June 19, 2019 | 12:00 am

How PSEi member stocks performed — June 18, 2019

June 19, 2019 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Tuesday, June 18, 2019.

Tobacco-growing areas to receive P15.81B from excise

June 18, 2019 | 10:27 pm

THE government will release P15.81 billion collected from excise taxes on tobacco products using domestically-grown Virginia, Burley and native varieties to local government units (LGUs) to assist farmers in improving their productivity or shifting to other crops, the Department of Budget and Management (DBM) said in a memorandum order.

Of the P15.81 billion sourced from 2016 excise tax collections, P12.88 billion was generated by from cigarettes, and P2.93 billion by tobacco.

Ilocos Norte generated excise tax from cigarettes of P7.68 billion in 2016, followed by Abra with P1.92 billion; La Union P1.45 billion; and Misamis Oriental P775.4 million.

According to the DBM memorandum signed by officer-in-charge Janet B. Abuel on June 14, the funds will support the promotion of self-reliance by tobacco farmers through cooperative projects; livelihood projects focusing on developing alternative farming systems; post-harvest and secondary processing facilities; and infrastructure projects such as farm-to-market roads.

Under Republic Act 7171, LGUs producing Virginia-type cigarettes are entitled to 15% of the national tax collection.

For non-cigarette tobacco products, Isabela generated P1.426 billion in 2016 excise.

Other provinces generating excise tax in this segment were Abra, Kalinga, Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Cagayan, Nueva Vizcaya, Tarlac, Occidental Mindoro, Misamis Oriental, Maguindanao and North Cotabato.

Under Republic Act 8240, LGUs producing burley and native tobacco are also entitled to a 15% share from the excise generated by these products, with 10% going to provinces and the 90% to cities and municipalities, depending on their share of tobacco production volume.

“The individual shares of the beneficiary LGUs were computed based on their respective volumes of production and trade acceptances, as reflected in the certifications issued by the National Tobacco Administration and endorsed by the Department of Agriculture,” the DBM said in its memorandum.

Finance Secretary Carlos G. Dominguez III has said that the Department of Finance (DoF) will work with the top tobacco producing regions to allot funds for crop diversification. The DoF and the Department of Health aim to reduce if not eliminate the use of cigarettes by increasing the excise tax per pack to P60 from P35.

“We will work with the four tobacco producing provincial local government units (LGUs) who collectively receive about P15 billion annually as their share of the tobacco tax, to allocate funds for crop diversification,” Mr. Dominguez said. — Reicelene Joy N. Ignacio