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New normal

For National Basketball Association fans, news that practically all players want to return to the court as soon as possible can’t but be deemed positive. Even with the Board of Governors expected to unanimously fall behind Commissioner Adam Silver in his plan to restart the 2019–20 campaign with a mishmash schedule that incorporates a truncated transition to the playoffs, genuine safety concerns still exist at a level that presents not insignificant risks to purveyors of the league’s principal product. Having them compete in a bubble and limiting their physical contact with extraneous quarters present a whole new set of complications.

The fact that players want to, well, play speaks volumes of their mindset. They feel they’ve already been cooped up much too long for comfort, and thus cannot wait to get reacquainted with the sport they’ve been part of practically their entire life. Which is why they’re willing to accept a reasonable measure of risk in so doing. Needless to say, trust weighs heavily in their decision. They’ve long known Silver to consider their interests in every big decision the NBA has made, and are happy to see union head Michele Roberts and representative Chris Paul strongly advance their cause as well.

The irony is that dismay from among the ranks, if any, has to do with the prospect of their continued inactivity. With the league bent on minimizing health issues by limiting the number of teams to be called to action, stalwarts wearing the colors of those left out are consigned to wonder when they can resume the practice of their profession. In this regard, choices for the immediate term inevitably affect the foreseeable future. When will the 2021–22 season begin? No, scratch that: When will preparations for the 2021–22 season begin? There are tolls exacted by the absence of physical and emotional well-being.

Nonetheless, there can be no denying the strides the league has been making in establishing a new normal. True, the Board of Governors’ vote is just the start of a long journey. There remains much to be done. In the wake of complicated and contentious deliberations between pencil pushers and practitioners in, say, Major League Baseball, however, the NBA is revealed to be far ahead of the curve. It’s all credit to Silver and to his enlightened constituency. Full transparency works, and, in this particular case, appears to pave the way to success.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

Philippine stocks in best run since 2000 are Asia’s highlight

PHILIPPINE stocks climbed the most in Asia, heading for their best seven-day rally in two decades, on optimism that the economic fallout from the coronavirus outbreak won’t be as bad as feared after Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said monetary-easing steps were appropriate.

The Philippine Stock Exchange Index climbed as much as 3.6% as of 12:14 p.m. in Manila, taking its seven-day rebound to 18%. The peso advanced to 50 against the U.S. dollar for the first time since January 2018 as Mr. Diokno signaled a pause in interest-rate cuts.

The nation’s shares have joined a global rally on hopes of the economic recovery after the coronavirus outbreak will be quick. The Philippine index has rebounded 40% from a low in March, and foreign investors are back to pouring money in the country’s equity funds this month.

“It’s being driven by optimism from the reopening of economies around the world, not only the Philippines,” said Japhet Louis Tantiangco, an analyst at PhilStocks Financial Inc. “Momentum is building up. Investors are focused on the prospects of a recovery,” he said, adding that investors are shrugging off geopolitical risks between U.S. and China.

The Philippine peso gained 0.2% against the U.S. dollar, climbing the most among Asian currencies. The nation’s 10-year bond yield rose for a third day Wednesday, adding two basis points to 3.28%.

Expectations of a shorter contraction are building since lockdowns in Manila and neighboring areas have eased starting June 1. A sustained climb for the Philippine index above 6,100 is a signal that “the rally has still some gas to test the 6,500,” said Jonathan Ravelas, a strategist at BDO Unibank Inc.

Shares of retailer SM Investments Corp. contributed the most to Thursday’s rally, while GT Capital Holdings Inc., Metropolitan Bank & Trust Co., and Robinsons Land Corp. gained the most, rising more than 6.5%. A total of 23 of the benchmark gauge’s 30 members climbed.

“This reopening comes with risk that infections will further spread as we allow more movements,” Mr. Tantiangco said. “The longer this rally goes on the more susceptible it is to profit-taking.” — Bloomberg

‘Near impunity’ for drug war killings in the Philippines, U.N. report says

GENEVA — Tens of thousands of people in the Philippines may have been killed in the war on drugs since mid-2016, amid “near impunity” for police and incitement to violence by top officials, the United Nations said on Thursday.

The drugs crackdown, launched by President Rodrigo Duterte after winning the election on a platform of crushing crime, has been marked by police orders and high-level rhetoric that may have been interpreted as “permission to kill,” it said.

Police, who do not need search or arrest warrants to conduct house raids, systematically force suspects to make self-incriminating statements or risk facing lethal force, the U.N. human rights office said in a report.

There has been only one conviction, for the 2017 murder of Kian delos Santos, a 17-year-old Manila student. Three police officers were convicted after CCTV footage led to public outrage.

“Despite credible allegations of widespread and systematic extrajudicial killings in the context of the campaign against illegal drugs, there has been near impunity for such violations,” the report said.

Police say their actions in the anti-drug campaign have been lawful and that deaths occur in shootouts with dealers resisting arrest.

According to the report, some statements from the highest levels of government had “risen to the level of incitement to violence” and “vilification of dissent is being increasingly institutionalized.”

“The human rights situation in the Philippines is marked by an overarching focus on public order and national security, including countering terrorism and illegal drugs,” it said.

But this was “often at the expense of human rights, due process rights, the rule of law and accountability.”

“The Government has also increasingly filed criminal charges, including by using COVID-19 special powers laws, against social media users posting content critical of Government policies and actions,” the report added.

It will be presented to the U.N. Human Rights Council later in June.

Lawyers and activists raised the alarm this week over a new anti-terrorism bill pushed by Duterte, warning of draconian and arbitrary provisions that could be abused to target his detractors.

DRUG-RELATED KILLINGS

Most victims in the drug war are young poor urban males, the U.N. report said. Their relatives described “numerous obstacles in documenting cases and pursuing justice.”

“The most conservative figure, based on Government data, suggests that since July 2016, 8,663 people have been killed – with other estimates of up to triple that number,” it said.

The U.N. cited reports of widespread drug-related killings perpetrated by unidentified “vigilantes” and a Philippine government report in 2017 that referred to 16,355 “homicide cases under investigations” as accomplishments in the drugs war.

A 2016 police circular launching the campaign uses the terms “negation” and “neutralization” of “drug personalities,” it said, calling for its repeal.

“Such ill-defined and ominous language, coupled with repeated verbal encouragement by the highest level of State officials to use lethal force, may have emboldened police to treat the circular as permission to kill,” it said.

Government figures show that 223,780 “drug personalities” were arrested from mid-July 2016 through 2019, but unclear charges and irregularities in due process raise concerns that “many of these cases may amount to arbitrary detentions.”

At least 248 land and environmental rights activists, lawyers, journalists, and trade unionists were killed from 2015 to 2019, the report said. So-called red-tagging, or labeling people and groups as communists or terrorists, had become rife. — Reuters

SteelAsia’s Ben Yao to vie for the EY World Entrepreneur Of The Year Award

SteelAsia Chairman, President and CEO Benjamin Yao, who was named the Entrepreneur Of The Year Philippines (EOYP) in 2019, will represent the country in the EY World Entrepreneur Of The Year (WEOY) Awards. The EY WEOY honors the trail-blazing business leaders of the world: the unstoppable visionaries who stop at nothing to achieve their ambition to make a difference.

EY WEOY is excited to collaborate with CNBC Catalyst, transforming EY World Entrepreneur Of The Year 2020 into a ground-breaking virtual experience unlike any before. The event will take place on June 4 at 19:00 BST (June 5 at 2:00 a.m. Manila Time). Everyone is invited and encouraged to attend.

EOYP Program Director Henry M. Tan says, “Mr. Benjamin Yao’s participation in the EY World Entrepreneur Of The Year Awards is a testament not only to his passion, ingenuity and dedication to the Philippine steel industry, but also to the competitiveness and world-class competence of all Filipino entrepreneurs.”

Mr. Yao joins some of our country’s most impressive and inspiring business leaders who have represented the Philippines in this prestigious annual event.

Register for the virtual event at https://www.cnbc.com/advertorial/weoy/ or visit the EY entrepreneurial hub at https://www.ey.com/en_gl/weoy.

Corporate tax cut by July unlikely

By Charmaine A. Tadalan and Jenina P. Ibañez Reporters

AN IMMEDIATE REDUCTION of the corporate income tax rate to 25% by July is unlikely, as the Senate prioritized other measures over the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill on Wednesday.

“We focused on the Bayanihan (2) bill,” Senate President Pro Tempore Ralph G. Recto said in a mobile phone message on Wednesday.

The CREATE bill is the revised version of the Corporate Income Tax and Incentives Rationalization Act, which now provides for an outright 5% reduction of the corporate income tax to 25% from 30%, as well as flexible tax and nontax incentives for investors.

Finance officials earlier hoped the lower tax would take effect by July, as part of efforts to stimulate an economy battered by a coronavirus pandemic.

The Department of Finance (DoF) earlier estimated the 5% tax reduction will cut government revenues by P42 billion in the second half if CREATE is implemented by July, and by another P625 billion in the next five years. The DoF hopes these foregone revenues will drive economic activity and allow businesses to continue funding their operations and keep their employees.

Congress was scheduled to adjourn sine die on Wednesday, but decided to hold another session today.

Asked whether the measure may still hurdle the Senate before the year ends, Mr. Recto said “yes, with amendments.”

Senate President Vicente C. Sotto III last week said the proposed CREATE was among the priorities of the chamber, but the Senate’s session agenda for Wednesday did not include the bill.

Under CREATE, the tax will be further reduced by 1 percentage point annually beginning 2023 until 2027. In its previous version, the bill proposed to gradually reduce the rate until it reaches 20% in 2029.

Albay Representative and House Ways and Means Committee Chairman Jose Ma. Clemente S. Salceda said in a separate message the measure might still be tackled in a “special session.”

“It’s up to the Executive, which we await,” Mr. Salceda said.

Finance Assistant Secretary Ma. Teresa S. Habitan said the DoF may request for a special session for the passage of the CREATE bill.

“We’re hoping it will be part of what is passed in the regular session. Otherwise, we might request for a special session,” she said in a mobile phone message.

The CREATE bill was among the recommendations of state economic managers to revive the economy. More than 30 local and foreign business groups have also supported the passage of the bill.

Mr. Sotto, however, said he doubts the measure would be taken up in a special session. He also said the Constitution bars Congress from holding sessions 30 days before the opening of the next regular session on July 27. This gives them only until June 8, should a special session be called.

Mr. Sotto said they can hold a session as late as June 8, but others are saying the latest they can do it is on June 11, taking into account some holidays. “To play safe… the last is June 8,” he said in an online briefing.

Meanwhile, the Philippine Ecozones Association (PHILEA) is backing the retention of the current incentives system for an additional 5 to 10 years, aligning itself with foreign and export groups.

PHILEA in a letter addressed to the Finance department and Senator Pilar Juliana S. Cayetano said retaining the incentives system during the pandemic or a specified and “reasonable” period would help the country be competitive in attracting investments from companies moving operations out of China.

The position of PHILEA, along with foreign and export groups, stand in contrast with other business groups that have supported the immediate passage of CREATE. The bill also rationalizes tax incentives, granting a transition period of up to nine years.

PHILEA, which represents 12 member companies and 20 industrial estates, said the Finance department must release a statement that existing incentives under the Philippine Economic Zone Authority should be retained for at least five years and ideally ten years.

“The statement must be forceful and irreversible in order to erase doubts that have been created in the minds of many companies both about the removal or reduction of incentives and the image that the Philippines is mercurial in its policy-making,” the association said.

PHILEA added that incentives timelines should be improved, noting that the Philippines is behind some neighboring countries in terms of the number of years incentives are offered.

The Joint Foreign Chambers of Commerce of the Philippines, along with an outsourcing industry group and electronics and wearables export groups, had said in their own position paper that incentives allowing companies to pay 5% tax on gross income earned in lieu of other national and local taxes should be retained for five years prior to sunset provisions.

The same groups back the immediate reduction of corporate income tax to 25% and pushed for accelerating reduction to 20% by 2025.

But PHILEA said that this reduction would be a welcome development for domestic manufacturers, but for exporters, it is more important to retain the existing tax incentives.

PEZA said it would recommend amendments for CREATE to apply only to domestic companies and small businesses, retaining status quo incentives for export companies.

PHILEA also asked that the Finance and Trade departments appoint a private sector counterpart in efforts to attract companies moving factory production out of China.

“This should preferably be a Philippine entity that can represent the country as a knowledgeable citizen. The assignment of the investment house would be to mobilize the players in the ecozone industry, coordinate with the relevant Government agencies, and identify and organize other factors that will give the country an advantage over its competitors,” the association said.

PHILEA added the government should create a major public relations program and to streamline industrial parks applications for ecozone approval to accelerate a “tedious and slow moving” process.

“A deadline for processing in each agency should be established and rigorously followed.”

House approves measure allowing transfer of bad loans to asset companies

By Genshen L. Espedido, Reporter

THE House of Representatives on Tuesday evening approved on final reading a bill that provides for the transfer of banks’ bad loans to asset management companies (AMCs), a move seen to bolster the country’s lenders.

With 202 affirmative votes, six negatives and one abstention, the chamber passed House Bill 6816 or Financial Institutions Strategic Transfer (FIST) bill in anticipation of a spike in nonperforming loans (NPLs) as the coronavirus crisis continues.

The bill stated it is necessary to create policies that “not only marshal available resources towards the most affected and vulnerable sectors, but more importantly, to strengthen the financial sector so that economic recovery can be achieved faster.”

Quirino Representative and House Committee on Banks and Financial Intermediaries Chair Junie E. Cua told BusinessWorld on Wednesday that the bill aims to boost banks’ liquidity in order for them to continue issuing loans.

“The purpose is to provide liquidity so that the banks can continue lending. Kasi kapag naipit na lahat ng assets nila sa nonperforming assets, wala na silang ipapautang, mag-cocollapse na ang banking system. Wala na ring makakautang,” he said in a phone interview.

Mr. Cua said they want to prevent a repeat of the 2008 Asian financial crisis where the banking industry saw a sharp rise in NPLs and nonperforming assets (NPAs).

“If you recall nung (2008) Asian crisis, ang NPL at saka NPAs umaakyat ’yan ng 20% ng total loan portfolio. Do you know how much it means? Sa 20% of loan portfolio, if you are talking a P10 trillion of total loan portfolio, 20% is P2 trillion, that is a lot of money. If you tie down that much of money in the banking industry, magiging very liquid ang banking industry. Walang mauutangan ang negosyante, ang maapektuhan negosyo. Ultimately, mga empleyado ang tatamaan,” he added.

Gabriela Party-List Rep. Arlene D. Brosas, who voted to reject the bill, said it will not guarantee protection for small and medium enterprises (SMEs).

“Sa halip na magpatupad ng moratorium sa loans para sa small- at medium-scale enterprises, gustong ipwesto ng panukalang ito ang malawakang buy-and-sell ng bad loans at reconcentration ng yaman sa kamay ng malalaking financial institutions. In the process this scheme dangerously socializes financial risks, instead of ensuring financial resiliency. This seeks to revive the Special Purpose Vehicle (SPV), which gained notoriety during the 2008 financial crash for being massive conduits of bad loans,” she told the plenary on Tuesday evening.

Under the proposed FIST, financial institutions can sell NPAs to AMCs that will be known as Financial Institutions Strategic Transfer Corporations (FISTCs) that would specialize in handling distressed assets.

In the case of NPLs, AMCs can restructure debt, condone debt and undertake other restructuring-related activities to dispose of the debt, including to third parties.

The bill also exempts the transfer of NPAs from a financial institution to an AMC, and from an AMC to a third party from the payment of documentary stamp tax, capital gains tax, creditable withholding income tax and value-added tax.

Transfers will also be subject to only 50% of applicable registration and transfer fees, 50% of filing fees on any foreclosure, and 50% of land registration fees. This will be available for up to two years from the date of the effectivity of the bill’s implementing rules and regulations.

The FIST bill also provides that any loss incurred by financial institutions as a result of the transfer of NPAs will be treated as ordinary losses, provided that the accrued interest and penalties will not be included as loss; the carry-over will be subject to pertinent laws; and the tax saving derived by financial institutions from the net operating loss carry-over will not be available for dividend declaration.

The measure also encourages the private sector, government financial institutions, and government-owned and -controlled corporations to incorporate and invest in FISTCs and help in the rehabilitation of distressed businesses “with the end view of contributing to economic growth.”

Under the bill, any fraud, collusion or irregularity committed during the transfer of NPAs will be subject to penalties and other pertinent laws and regulations. Violators will face a maximum of P2-million fine and/or imprisonment of not more than 12 years.

Even though the government badly needs funds for its COVID-19 response, Ms. Brosas said the measure will give fiscal incentives like tax breaks on the transactions of AMCs.

“This bill will also provide FISTCs more power to control bank loans and rental rates, which will eventually force Filipinos to pay higher rental rates in condominium units located in Central Business Units,” she added.

Mr. Cua defended the fiscal incentives provided in the FIST bill, saying these are the “least” the government can do to help the banking sector.

“Well, that is a price that we need to pay because we are trying to encourage them nga to dispose of their assets eh. And under abnormal situations, the government must help by alleviating the situation and that’s the least they can do, not to collect the tax,” he said.

At the same time, the House also approved on third reading two measures, including HB 6768 or the Financial Products and Services Consumer Protection Act which gives financial regulators additional powers to protect consumers.

Also approved was HB 6817, which prohibits discrimination against persons who are declared confirmed, probable and recovered cases of COVID-19, healthcare workers and repatriated Filipinos.

HB 6920 or the COVID-19 Unemployment Reduction Economic Stimulus (CURES) Act of 2020 was passed on second reading. The proposed CURES law calls for a P1.5-trillion spending program over three years to address slowing economic growth and create jobs.

Mindanao recovery must look beyond agricultural strength

TWO weeks into the more relaxed lockdown policy in the entire Mindanao, entrepreneurs of non-basic goods that have been allowed to resume operations have yet to see signs of business recovery.

Car accessories dealer Mercedes G. Duduaco, also president of the Philippine Marketing Association-Davao, said many businesses are weighed down by bills that are piling up and the slow return of customers, among other concerns.

“This is our second week of operation. Hoping that there will already be customers, but (there’s) still none. Maybe because many still fear being infected by people who are asymptomatic (carriers of the coronavirus),” she said in an online interview.

“For almost three months now we are under quarantine and lockdown, the bills are coming, utility bills, loans, bank interest, everything is compounding plus all the supplies that we got from the suppliers are now overdue. Where will we get the money to pay? There are no sales and income,” she said.

Fermin D. Adriano, a member of the Asian Development Bank Institute Advisory Council, puts the situation plainly: “This is going to be a very difficult recovery.”

“Jobs have been lost… loss of jobs means loss of income. You don’t have demand, even in agricultural products,” Mr. Adriano, who also serves as special adviser to the Agriculture secretary, said during a May 29 webinar on the Mindanao economy organized by the European Chamber of Commerce and Industry and the Davao City Chamber of Commerce and Industry.

He cited as an example an oversupply of chicken with the closure of restaurant chains.

Mindanao accounts for over 33% of the country’s farming and fisheries production, and about 60% of income from agricultural exports with banana and coconut as top commodities.

Within Mindanao, however, the agriculture sector contributes only 18% to the regional economy, lower than the industrial sector at 36%.

The highest share at 46% comes from the services sector, which covers labor, skills, and technology.

Jeffrey Leocario, owner of signage maker Wallmount Advertiser, said apart from stopping production for two months, border closures have also prevented them from making deliveries.

“All our projects are outside Davao City, then my business is considered non-essential, so entry and exit per local government was a problem. When it comes to clientele, since we are handling corporate accounts, for two months we stopped all production. We were not prepared for that,” he said.

Philippine Chamber of Commerce and Industry Vice-President for Mindanao Ma. Teresa R. Alegrio, in the same webinar, said while the private sector recognizes agriculture as a strength of the southern islands and will be crucial in reinvigorating the economy as well as ensuring food security, they are also looking beyond food crops for broader development.

“On the way to recovery…there are several things that we are considering here, but it’s really more of looking at what resources we have now that we can optimize, I’m talking here not only of agricultural products but even industrial crops that can be used by manufacturing companies for diversification,” she said.

She cited commodities like rubber for medical supplies, sugar cane for ethyl alcohol, and abaca for face masks.

Mindanao Development Authority (MinDA) Executive Director Romeo M. Montenegro said as consumers are expected to limit spending to essentials such as food, medicine, transport, and connectivity, Mindanao should move towards localizing supply chains and develop multiple providers.

“What we’re seeing is for Mindanao to look at the direction of being able to produce all of these… Right now, 70-80% of basic necessities we are consuming here are derived from Luzon,” Mr. Montenegro said.

Luzon, which includes the National Capital Region, accounts for an average 73% of national production in the last 10 years.

Economist Cielito F. Habito, who served as socioeconomic planning secretary under the Ramos administration, said while it will undoubtedly be a “rough ride” ahead, the coronavirus crisis “can be taken advantage of to really have fundamental changes for a better new normal.”

And this new normal, he said, includes “more geographically dispersed economic activities so that Manila and its surrounding provinces are not the dominant areas of production in the country, and we’d like to see more of it in Mindanao, obviously.” — Maya M. Padillo and Marifi S. Jara

BSP chief Diokno says he’s happy where key rate is

PHILIPPINE CENTRAL BANK Governor Benjamin Diokno said the monetary easing implemented against the coronavirus was appropriate, and that further action will depend on the economic recovery.

“Right now, we’re happy where the current policy rate is,” Mr. Diokno said on Wednesday in an interview with Bloomberg. Monetary authorities are ready to use all the tools at their disposal, but are likely to do so only if “there’s more bad news.”

As lawmakers debate fiscal stimulus measures, the Bangko Sentral ng Pilipinas (BSP) has done much of the heavy lifting in terms of virus relief. Monetary authorities have cut the benchmark interest rate this year by 125 basis points to 2.75%, lowered the ratio of funds lenders must hold in reserve by 2 percentage points, eased rules on bank capital and reserves and deployed a bevy of measures to stabilize the bond market.

Mr. Diokno said negative interest rates are “out of the question” for the Philippines, adding that “some governments would want to have positive real rates.” Economic activity should pick up as businesses open, but there’s a risk that people will stay at home for fear of catching the virus, Mr. Diokno said.

President Rodrigo Duterte has begun loosening a lockdown on the capital region that has been among the world’s strictest. With activity slowing sharply in recent months, the Philippine economy faces its deepest contraction in three decades this year.

Policy makers are scheduled to meet again on the key rate on June 25.

The Bangko Sentral is leaving it up to the country’s Treasury to make use of additional repurchase agreements with the government.

Mr. Diokno also said moves made by the central bank have funneled an estimated P1.1 trillion ($21.9 billion) into the financial system, with bond-buying activities in the secondary market accounting for just a “small” portion of that.

The central bank participates in the foreign exchange market “only to smooth the fluctuations;” the strength of the peso and other regional currencies is “because of the weaker dollar.” — Bloomberg

AC Energy group puts up A$777-million bid for Australian renewable company

By Adam J. Ang

A COMPANY controlled by AC Energy, Inc. has offered A$777 million to take over an Australia-listed renewable energy firm in a deal that could further boost the Ayala group’s clean energy capacity.

Listed conglomerate Ayala Corp. told the stock exchange on Wednesday that UAC Energy Holdings Pty. Ltd. had acquired a 12.82% stake in Infigen Energy Ltd. for A$90.4 million.

Separately, Infigen disclosed to the Australian Securities Exchange on Wednesday that UAC intends to buy more shares at A$0.80 each apart from its already acquired stake. UAC said in a press release that the off-market takeover bid implies an equity value of A$777 million for 100% of Infigen.

“Our investment into Infigen reflects our confidence in the prospects for renewable energy in Australia. Investing into an operating renewable energy portfolio helps us meet our corporate and sustainability objectives. We are excited to support Infigen as it continues to expand in this sector,” AC Energy Chairman Fernando Zobel de Ayala said in a statement.

AC Energy’s parent Ayala Corp. said the investment is part of its energy unit’s aim to bolster renewables capacity by 2025.

“The investment in Infigen is a crucial move forward for AC Energy’s regional expansion as it remains committed to its goal of exceeding 5GW (gigawatts) of attributable capacity, with 50% of energy generated from renewables, by 2025,” the listed conglomerate said in a disclosure to the Philippine Stock Exchange, Wednesday.

Ayala expects the affiliate company’s offer to be a “months-long process.” The bid is subject to approval from the Australian Foreign Investment Review Board and the acceptance of Infigen’s security holders.

“The acquisition of interest in Infigen by UAC strengthens both AC Energy’s and UPC\AC’s commitment to provide low-cost power in Australia by expanding its operating portfolio and enabling the sale of energy through retail channels,” the company said.

Infigen develops, generates, and sells renewable energy. It owns and operates 670 megawatts of wind farms in Australia, along with gas, battery, and contracted assets.

UAC is 75% owned by AC Energy. The remaining 25% is held by UPC\AC Renewables Australia, a joint venture of the Ayala unit and UPC Renewables Australia.

“The Infigen investment is highly complementary to our previous investments in UPC\AC Renewables Australia, where we are already developing a large portfolio of renewable energy assets,” AC Energy President Eric T. Francia said.

The joint venture is currently developing four renewables projects in Australia.

“We have ready access to capital and significant renewable energy expertise that will position us well to support Infigen’s pipeline of projects and focus on much needed renewable energy investment and associated employment in Australia,” UAC Chairman Anton Rohner said in a press statement.

On Wednesday, shares in Ayala Corp. rose by 1.82% to close at P755.50 each.

Cebu Landmasters maintains P10-billion capex for 2020

By Denise A. Valdez, Reporter

CEBU Landmasters, Inc. (CLI) is leveling its budget for capital expenditures (capex) this year with last year’s P10 billion spending as it tempers aggressiveness for land acquisition.

In an online briefing on Wednesday, CLI Chairman and Chief Executive Jose R. Soberano III said the company is focusing on rolling out 12 more projects in the second half of the year, which would raise its 2020 launches to a total of 14 projects.

This pipeline would add P19.4 billion worth of projects to the company’s inventory, which is currently down to around P10 billion.

“Because of these 14 projects that we have laid down for 2020, including the two that we have launched already and the 12 that we are definitely launching by the second half, we could see (our capex this year) around (the same range as last year’s P10 billion),” Mr. Soberano said.

“There’s going to be not much but there’s still going to be a significant amount that we will have to expense in terms of capex. Why is it going to be just about the (same) number? Because mainly there is going to be not much aggressive acquisition to be expected for the remaining months,” he added.

Mr. Soberano said CLI has “enough on its plate,” as it has 108 hectares of property in its landbank which it would use for new developments that will be rolled out in the next three to four years.

The company currently has 40 ongoing projects in various stages of development and about 27 projects in the pipeline based on the properties it has acquired.

“With the inventory that we have lined up for projects mainly for the residential market in 2020, particularly the second half launches, and even those landbank that we have already acquired to serve the mixed-use and hospitality project lines, there is no need for Cebu Landmasters to do some major acquisitions this year,” Mr. Soberano told stockholders in an online meeting.

CLI booked an attributable net income of P572.23 million in the first quarter, lower by 4% from a year ago, as its costs and expenses grew faster than the 13% rise in revenues to P2.11 billion.

The company is projecting its bottomline this year to be plus or minus 10% of the P2.01 billion it recorded in 2019. Mr. Soberano said this is a “very guarded optimistic posturing,” noting support may come from a private equity play that CLI is currently exploring.

“We…are already negotiating with some private equity investors, or even listed companies who have approached us, on what possibilities that we could have in the coming months, which equity play we hope to be able to realize within the second half of 2020,” he said.

Amid the economic decline due to the coronavirus disease 2019 (COVID-19) pandemic, CLI remains hopeful that demand for its projects will be sustained because of the housing backlog in the Visayas and Mindanao regions.

“Even with the slowdown, there is a strong demand for housing, especially in VisMin,” Mr. Soberano said. “There might be readings that things will turn cold, especially from the OFW (overseas Filipino workers) market, but yet we in Cebu Landmasters are able to still generate interest from buyers.”

Mr. Soberano credits the company’s digitalization infrastructure for its sustained operations during the lockdown period, during which time it was able to record P2 billion worth of reservation sales.

Shares in CLI at the stock exchange gained 15 centavos or 4.11% to P3.80 each on Wednesday.

ABS-CBN’s Lopez willing to give up US citizenship

By Genshen L. Espedido, Reporter

ABS-CBN Corp.’s Chairman Emeritus Eugenio Gabriel L. Lopez III said during a joint hearing at the House of Representatives that he would give up his American citizenship if it “came down to conflict of interest” regarding his management of the network.

Asked by Anakalusugan Party-List Rep. Michael T. Defensor if he considered renouncing his American citizenship, Mr. Lopes replied: “Yes, I have considered it. But you know, the way I see it, I am first and foremost Filipino. I will live and die in the Philippines, that has certainly been the family’s position. If it came down to conflict of interest, I would give up my US citizenship in a minute.”

Meanwhile, the majority of lawmakers who questioned his citizenship were convinced that he is Filipino.

Justice Undersecretary Emmeline Aglipay-Villar said that Mr. Lopez never lost his Filipino citizenship despite being born in the US and holding an American passport.

“Ang kanyang paggamit ng US passport ay hindi dahilan para mawala ang kanyang Filipino citizenship. At ang hindi niya pagkakaroon ng Philippine passport ay hindi rin dahilan para hindi siya maging Pilipino,” she said during the joint hearing of the House committees on legislative franchises, and good government and public accountability.

(His use of a US passport is not a reason to lose his Filipino citizenship. And his not having a Philippine passport is also not a reason for him not to be a Filipino.)

Albay Rep. Edcel C. Lagman said that Mr. Lopez’s citizenship is a non-issue because he is “undeniably a natural born Filipino citizen.”

“I submit that the allegation that former ABS-CBN President and Chairman Eugenio Lopez III is an American citizen is a non-issue because he is undeniably a natural born Filipino citizen, having been born of a Filipino father as well as a Filipino mother. No amount of interpellations would change this overriding and unalterable fact,” he said.

Despite acknowledging Mr. Lopez’s Filipino citizenship, Ako Bicol Party-List Rep. Alfredo A. Garbin questioned whether a dual citizen can own a mass media company.

“Gabby Lopez is a natural born citizen, but he is also an American citizen by principle applied in American law. Ang tanong ho ba, whether a dual citizen can own a mass media company?” Ako Bicol Party-List Rep. Alfredo A. Garbin said.

Mr. Lopez’s lawyer Mario L. Bautista said the 1987 Constitution does not prohibit a dual citizen from owning a media company.

“Ni minsan po, wala po kaming narinig na question o reklamo from the SEC (Securities and Exchange Commission) or from the DoJ (Department of Justice), who are vested the jurisdiction, authority, and most importantly, the expertise with respect to the nationalization law. Wala pong nagsasabi sa amin na kapag dual citizen ka, ‘di puwede,” he said.

(Not once have we heard of a question or complaint from the SEC or the DoJ, who are vested the jurisdiction, authority, and most importantly, the expertise with respect to the nationalization law. We have never been told that a dual citizen is prohibited.)

The two panels were tackling Mr. Lopez’s citizenship to aid their decision whether to give a new franchise to ABS-CBN. The 1987 Constitution states that media companies should be 100% Filipino-owned.

The next hearing on the network’s franchise will tackle the issue on Philippine Depositary Receipts (PDRs). Solicitor General Jose C. Calida’s quo warranto petition claimed that the network violated the constitutional prohibition on foreign ownership of media when it issued PDRs to foreigners through ABS-CBN Holding Corp.

The House committees will convene again on June 8.

Stylish masks made with Mindanao weave

DAVAO CITY — With face mask now a must-have accessory, fashion designer Wilson Niñofranco Limon has taken the opportunity to help meet demand while continuing his advocacy of promoting local craftsmanship.

“The prints that we use for the #MaskofHope were from my previous collections,” he said via messenger.

Mr. Limon, along with three needleworkers, produce three-layered “washable, reusable, and breathable” face masks made from neoprene fabric with patterns from Mindanao’s ethnolinguistic groups.

Among the mask designs are the Manata which is inspired by the inabal, a traditional textile of the Bagobo-Tagabawa made from abaca; Flanek, a print from Mr. Limon’s Spring Summer 2015 collection, which features the bayanihan (community) spirit of the B’Laan; and the Stellar pattern from the T’Boli.

“This project is very close to my heart. It takes me back to where I started… Stellar is a fashion design competition that I joined way back year 2016. It was my first win also,” Mr. Limon said.

Twenty percent of the mask sales go to the indigenous communities through the Wimler Organization for Bagobo weavers, Lake Sebu Indigenous Women Associations, Inc., the Ateneo de Davao University Community Engagement and Advocacy Council, and the Lamlifew Tribal Women’s Association.

The masks are priced at P499 each, P899 for two masks, P1,149 for three, and P1,500 for four, exclusive of shipping costs.

Since launching in mid-May, Mr. Limon said most of the orders have been from Davao City and Manila, and they are hoping to meet international orders soon. Orders can be placed through the link https://forms.gle/LRbxgv4HHQnC71396 and through Mr. Limon’s facebook page @ninofranco.ph. — Maya M. Padillo

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