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PSEi caps five days of losses after BSP’s RRR cut announcement

THE PHILIPPINE STOCK EXCHANGE index (PSEi) snapped a five-day losing streak on Friday, with the financial sectoral index gaining the most a day after the Bangko Sentral ng Pilipinas (BSP) announced a 200 basis point phased cut to big banks’ 18% reserve requirements ratio (RRR).

The PSEi gained 108.66 points or 1.45% to finish 7,583.82 — but still marked the second straight weekly fall of 2.05% — while the all-shares index increased by 50.41 points or 1.08% to end 4,713.27.

“Sentiment got a boost from the BSP’s decision to cut the reserve requirement

by 200bps in three stages beginning with a 100bps cut on May 31,” RCBC Securities, Inc. said in a Stock Market Weekend Recap authored by research analyst Fiorenzo D. De Jesus.

Timson Securities, Inc. trader Jervin S. De Celis said the BSP’s latest policy step provided “a cushion for this falling market.”

“This move by the BSP means more liquidity in the economy and more money for banks to lend for growth amid slowing inflation and lower-than-expected [5.6%] GDP [growth] rate in the first quarter,” Mr. De Celis said in a mobile phone message on Friday.

“However, this bounce may not last at all because investors will be rebalancing their portfolio in accordance with the changes in the index weights reported by MSCI.”

Regina Capital Development Corp. Managing Director Luis A. Limlingan said Wall Street’s rise on Thursday in the wake of strong macroeconomic data and bargain hunting at home fueled PSE’s recovery on Friday. At the same time, “… [i]nvestors weighed the latest developments on the trade front after President Donald Trump appeared to target Chinese telecommunications group Huawei with an emergency declaration against threats to US technology,” Mr. Limlingan said in a text message.

Four of the six local sectoral indices gained: financials by 37.35 points or 2.24% to finish 1,700.73, services by 38.37 points or 2.4% to 1,636.59, property by 65.62 points or 1.61% to 4,138.89 and holding firms by 74.45 points or 1.06% to 7,069.9.

Mining & oil fell by 31.28 points or 0.42% to finish 7,256.66, while industrials gave up 32.55 points or 0.29% to end 11,058.42.

Stocks that gained outnumbered those that lost 122 to 72, while 40 issues ended flat.

Trading thinned as Friday saw 935.86 million shares worth P8.207 billion change hands, compared to Thursday’s 2.325 billion shares worth P8.56 billion.

Investors abroad remained predominantly bearish, although net sales slipped to P1.387 billion on Friday from Thursday’s P1.854 billion. RCBC Securities’ Mr. De Jesus noted that the week saw “massive net foreign selling of almost P6 billion”. — J. C. Lim

Inspiring eco-innovation in Aurora, Quirino, and Palawan

Spearheading a movement towards environmental conservation this Earth Month, Impact Hub Manila and Forest Foundation Philippines launch a local scaling program for community-based social enterprises.

The Social Entrepreneurship Engagement & Development (SEED) program aims to catalyze growth of the Philippine social enterprise pipeline through providing entrepreneurs in the provinces with the same incubation opportunities that startups in Manila have access to.

However, participants of the program will not only have business profit on their minds. Integral to the development program is its emphasis on ecosystem management. The weavers, farmers, and fishermen will be taught best business practices that support the UN’s Global Sustainable Development Goals.

The research team has conducted research in Palawan and Sierra Madre, immersing in the communities to evaluate the existing social enterprise ecosystems in each. Indubitably, the provinces are teeming with untapped business potential. There is prominent support for community members’ own ventures that ranged from aquaculture to woodcarving. Although the program will reinforce the ecosystems in each community, it will also give entrepreneurs a chance to take things up a notch.

The SEED program will spark eco-innovation within the social entrepreneurs by awarding a grand prize of continuous incubation support from Impact Hub Manila, hoping to ignite the Filipino inventive entrepreneurial spirit. This will feature free one-on-one coaching and consultancy, access to working space, and several opportunities in the global network of industry leaders and business pioneers.

With an ambitious goal of strengthening the country’s social enterprise ecosystem across the regions, the program will also draw support from the dynamic startupsphere of major cities in the Philippines. For those who are interested in sharing important social enterprise insights, Impact Hub and Forest Foundation encourage successful entrepreneurs and startups to become a part of the program by signing up for its mentors pool.

You can learn more about the SEED program on Impact Hub Manila’s site here.

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Isabell J. Kittel is the research officer of Impact Hub Manila, the world’s largest network focused on building entrepreneurial communities for impact at scale.

Mondelēz International delivers strong progress against its sustainability and mindful snacking goals

MANILA, Philippines. – May 17, 2019 – Mondelez Philippines today shared its 2018 Global Impact Progress Report, announcing significant progress against its 2020 Impact Goals. The report highlights how the world’s leading snacking company meta major global well-being target, achieving 15 percent of net revenue from portion control snacks, two years ahead of expectations. The report also describes advancements against the Company’s 2020 global environmental footprint goals.The significant progress the Company continues to deliver against its Impact goals demonstrates its mission to lead the future of snacking by creating snacks made the right way, for both people and the planet.

Mondelez Philippines utilizes a Biomass Boiler in its Sucat, Paranaque manufacturing plant, which uses biodegradable sources of fuel like rice hull and coconut husks. This is one of the many ways the Company is making the right snack for consumers, for the right moment and made the right way.

“We believe that consumers should not have to choose between snacking and eating right, or to worry about the impact their snacking choices have on the world and their communities,” said Ashish Pisharodi, Country Director of Mondelez Philippines. “Our company is playing a significant role in making snacking both sustainable and mindful by creating a future where people and planet thrive, and evolving our portfolio to inspire mindful snacking habits. We are proud of our global progress in 2018, particularly in well-being snacks, where we were able to reach a major goal ahead of schedule. We are also proud to share our local achievements, which contribute to these goals.”

The Company focuses its efforts on areas where it can have the greatest impact and drive meaningful change at scale in sustainability and mindful snacking.  Following are highlights of the company’s 2018 global progress:

  • Sustainable Snacking: creating a future where people and planet thrive by creating resilient ingredient supply chains, reducing environmental impact and developing zero-net waste packaging.
    • Reduced absolute CO2 emissions from global manufacturing by 10 percent. The Company’s plant in the Philippines now runs on sustainable geothermal energy, which will help reduce carbon emissions. It also utilizes a Biomass Boiler, which uses biodegradable fuel sources like rice hull and coconut husks.
    • Reduced global incoming water usage by 22 percent at locations where water is most scarce.
    • Eliminated 59,600 metric tonnes of packaging globally, on target to reach 2020 goal of 65,000 metrics tonnes of packaging eliminated. Locally 98% of the packaging used by the Company in its manufacturing plant are already either recycled or recyclable. Three Philippine public elementary schools are also set to receive recycled plastic play areas from the Company. These play areas will be made of ecobricks, or plastic bottles stuffed with plastic packaging.
    • Achieved an 18 percent reduction globally in Total Recordable Incidents (TRIs) and 11 percent decrease in Total Incident Rate (TIR) for all employees. In the Philippines the Company recently celebrated the achievement of 4 million safe effort hours in its plant.
  • Mindful Snacking: rethinking the experience of snacking; evolving the product portfolio with more options; inspiring mindful snacking habits that focus on savoring each bite and mobilizing innovative partnerships for impact.
    • Achieved our global goal two years ahead of target of reaching 15 percent of our net revenue from portion control snacks, which are individually wrapped and 200 calories or less. Portion control snacks of the Company which are locally available include Cadbury Dairy Milk Lickables 20g, Cadbury 5Star 15g, Mini Oreo pouch packs 23g, Oreo 3-piece packs 29.4g, Cadbury Dairy Milk Share Packs 15g and belVita single 20g.
    • Improved the nutrition and ingredient profile of our biggest selling brands, reducing global sugar levels by 1 percent in Milka and Oreo. Locally, the sugar content of Tang powdered beverages has been reduced by as much as 40% since 2008.
    • Allocated 95 percent of our $50 million global investment to healthy lifestyle community partnerships, impacting the lives of 1.5 million children across 18 countries by increasing their nutrition knowledge, providing opportunities for physical activity and access to fresh fruits and vegetables. In the Philippines, the Company has adopted as many as 16 public elementary schools, impacting 4,500 students, through feeding programs and other nutrition interventions under the Joy Schools program.

The Company remains committed to using its global scale and focus where it can continue to make the biggest difference and has outlined its 2025 Global Sustainability Goals, providing a clear road map for the years ahead:

  • Reducing our environmental impact by committing to make all packaging recyclable by 2025.
  • Scaling our Cocoa Life sustainability program even further so that by 2025, all chocolate brands will source their cocoa from Cocoa Life. Cocoa Life is the Company’s global cocoa sustainability program.
  • Minimizing food waste, end-to-end CO2 emissions and priority water usage by 2025.
  • Growing portion-control products to 20 percent of global net revenue by 2025.
  • Including portion amounts and mindful snacking information on all packages globally by 2025.
  • Creating and continuing to invest in community resiliency and well being through Mondelēz International Foundation programs and partnerships.

For the full report, or to read the at-a-glance summary, click on the links below.

The explosive opportunity of Philippine eSports

By Bjorn Biel M. Beltran, Special Features Writer

Until very recently, the idea that anyone can make a living by playing video games has been nothing but a pipe dream. Nowadays, with the explosive popularity of competitive video games like League of Legends, Dota 2, Counterstrike: Global Offensive, and even mobile games like Mobile Legends: Bang Bang, and Arena of Valor, not only is it possible, but anyone can make bank just by playing, provided they have the skill and dedication.

Competitive video games, or eSports, have become a multimillion-dollar business. Moreover, this year, global eSports revenues are predicted to hit $1.1 billion, reportedly growing by 27% from 2018 due to skyrocketing revenues from advertising, sponsorship and media rights to competitive video gaming.

Much of this boom is attributable to the mainstream marketable appeal of eSports. Brand investments through advertising, sponsorship and media rights are expected to make up 82%, or around $897 million of the total revenues, nearly triple that of the brand support recorded in 2015, according to a report by Newzoo, a gaming industry analytics firm.

In addition, eSports audiences — comprised of both enthusiasts and occasional viewers — are expected to grow 15% to 454 million. By 2022, total global eSports revenues could be $1.8 billion.

In the Philippines, this growth is easily noticeable. Video games have broken onto mainstream social media platforms like Facebook. Celebrity streamers and professional gamers with thousands of followers play video games like Mobile Legends on live video streams. And with the launch of the ongoing inaugural season of The Nationals, the first franchise-based electronic sports league in the Philippines, sponsored by the MVP Group of Companies, eSports as a billion-peso industry is starting to take shape.

It is the culmination of the momentum that eSports has been seeing since the start of the decade. Despite the prevalence of video games in the country’s countless computer shops and Internet cafes, the eSports scene in the Philippines was primarily amateur in nature, held and funded by local Internet café owners and franchises. While eSports associations like the Major League Gaming or the Electronic Sports World Convention abroad were gaining influence in the 2000s, lack of funding, investment, or infrastructure hindered Philippine eSports from truly blossoming until recently.

Part of the reason for its slow adoption could also be attributed to the social stigma of video games in general. Video games, at the time, were seen as merely an unproductive pastime for children and teens. Multiple reports of teenagers getting addicted to video games, compromising their studies, responsibilities, and even their health, further exacerbated negative public opinion.

The fact that many students were spending countless hours in computer shops to play video games lends a semblance of credibility to such negative views on gaming. According to an exploratory study published in the International Journal of Cyber Society and Education in 2012, 73% of Internet cafe customers in Manila were found to be students.

The study, titled “Pattern of Internet Usage in Cyber Cafes in Manila,” found that 72% of those surveyed had attained or were pursuing a college degree, and 20% had finished or were still in high school. Presumably, a number of such students were playing video games at the expense of their studies.

Even today, that stigma persists.

“For now, the main challenge is educating everyone that eSports is becoming an actual sport,” Marlon Marcelo, country manager of MET Events, the event-organizing arm of Mineski Corporation, the largest eSports organization in Southeast Asia, told BusinessWorld in a previous report.

The Mineski Corporation has been an avid proponent of responsible gaming since its inception, holding grassroots tournaments in its Mineski Infinity cybercafes since its beginnings in the early 2000s, with the company also being one of the first to sponsor a professional eSports team in the country.

“You can be successful and be a gamer at the same time. It doesn’t mean that if you’re a gamer, you’re a loser or an addict, or you’re not successful in life. That is a very big misconception. Gaming is not equivalent to addiction, and gaming can be done right,” Mr. Marcelo said.

As companies like Mineski grew, proving the business potential of the industry, so did the fame of Filipino gamers in the eSports world. TNC Predator, the professional gaming team of Philippine net cafe chain TheNet.Com, placed first in the Southeast Asia Qualifiers at the 2016 season of the Dota 2 tournament, The International, the first Philippine team to do so since Mineski in 2011. More recently, they took home top prize at the World Electronic Sports Games (WESG) 2018 in March 2019 in Chongqing, China.

Securing its legitimacy as an officially recognized sport, the Philippine Games and Amusement Board (GAB), under the Office of the President, allowed professional eSports players to secure athletic licenses in 2017, which gave eSports players more freedom to participate in international tournaments to represent the country.

With the 30th SEA Games this year, which the Philippines will be hosting this November, including six eSports titles as medal events, and the talks of eSports becoming official medal sport for the 2022 Asian Games, there is no telling how bright the future of eSports in the Philippines can be. The only thing that can be certain is that this is just the beginning.

Taking eSports to the next level

By Mark Louis F. Ferrolino, Special Features Writer

The Philippine electronic sports (eSports) scene has come a long way. From a concept that was not widely accepted by the masses in its nascent years, eSports has grown into a giant industry that is now participated in by various companies and investors.

According to Ronald Robins, founder and chief executive officer of Mineski Corp., the largest eSports organization in Southeast Asia and the local eSports pioneer, it was very hard to say 10 to 15 years ago that eSports will grow into where it is today.

“ESports before was basically a leap of faith,” Mr. Robins told BusinessWorld in a previous interview. “There was that big uncertainty.” But because of the tireless efforts of various entities, the country’s eSports ecosystem has flourished and is slowly but surely reaching its peak.

Mineski’s three main business units — Mineski Pro Team, Mineski Franchise Corp. and Mineski Events Team (MET) — for instance, have significantly helped shape the industry by means of uplifting the professional gaming scene, providing high-end gaming facilities, and popularizing eSports across the country, among others.

Over the years, Mineski’s three arms have seen rapid growth, which highlights the growth of the local eSports industry.

From a professional gaming team that solely refers to an iconic Dota squad, Mineski Pro Team now features teams in different titles. Mineski’s cybercafé franchise business, on the other hand, currently boasts a network of 150 branches across the Philippines, Malaysia, Indonesia, and Thailand, while MET continues to establish itself as the premier organizer of large-scale esports events in the region.

“Mineski now means a lot of things in the eSports industry. We have been setting example, we have been leading the industry development, not just in the Philippines but in the Southeast Asia region,” Mr. Robins said.

Mineski has been helping boost the country’s eSports ecosystem, other firms, including Globe Telecom and Lenovo, have been also doing their shares.

With the aim of bringing world-class eSports experience closer to local communities of gamers, Globe recently launched its first Esports Center (ESC) at Play Nation in UP Town Center in Quezon City.

ESC is an experience hub where Filipino gamers and gaming enthusiasts can participate in the competition, creation of live streaming content, and interaction with other members of different eSports communities.

Globe, in partnership with Mineski, also unveiled early this year its official professional eSports team called “Liyab.” It is composed of sub-teams for different game titles, including League of Legends, Hearthstone, and Arena of Valor.

The creation of Liyab Team is part of the company’s vision through the Globe Games and Esports Program to accelerate the development of eSports in the country. Since its launch in April last year, Globe Games and Esports Program remain at the forefront of the local eSports landscape by organizing and hosting international tournaments such as the Globe Philippine Pro Gaming League, Globe Conquerors Manila, and Valor Cup.

Meanwhile, Lenovo, in partnership with Intel, recently concluded the Legion of Champions Series III Grand Finals held in Bangkok, Thailand. This eSports competition brought together over 60 gaming talents from 11 markets across Asia-Pacific, including the Philippines.

Last February, Lenovo opened its first Legion concept store in the country as part of its efforts to bring game-changing devices closer to Filipino gamers. Located at the fourth floor of the Annex building of SM City North EDSA in Quezon City, the Legion store features a wide range of products from Lenovo’s Legion gaming lineup, which visitors can personally test and play games on. To further engage the local gaming community, the store will also hold mini gaming tournaments occasionally.

A champion of countryside progress

The late Liberato “Levy” P. Laus was one of the few Filipino businessmen who championed countryside development. He, just like others, had his fair share of struggles. But with his idealism and passion, he was able to make a monumental shift in his career and helped shape the lives of many.

It was in 1978 when Mr. Laus, at the age of 28, left his corporate job as a bank manager to pursue his entrepreneurial vision. He took the challenge of putting up a business in his hometown, San Fernando — the capital of Pampanga — with a long-term goal of elevating countryside development to a new level and generating employment opportunities.

Mr. Laus started with a small automotive dealership, funded with a meager capital, with only three cars on display. Despite operating in a business environment threatened by both economic and political uncertainties during its inception, Mr. Laus’ business blossomed into a highly diversified conglomerate now known as the LausGroup of Companies (LGC).

The LausGroup is considered today as the largest multi-brand network and remains to be the biggest and fastest-growing auto dealership in the country. It has a large network of more than 55 dealerships across Metro Manila, Central Luzon and Northern Luzon, with a wide range of brands, including Mitsubishi, Ford, Hyundai, Chevrolet, BMW, Volkswagen, Jeep, Peugeot, Kia, Mazda, Nissan, Suzuki, Foton, and Haima.

Aside from automotive dealership, the LausGroup’s portfolio includes business interests in diverse industries. The group operates the Corporate Guarantee and Insurance Company, Comtrust Finance and Investment Corporation, Huper Optik Philippines, and Laus Marketing and Trading Corporation. It also owns several media outlets, restaurants, and an event center.

Over the years, the LausGroup, under the leadership of Mr. Laus as the founder and chairman, has remained committed to its core values of customer satisfaction, honesty and integrity, hard work and productivity, efficiency, and social responsibility.

As an affirmation to Mr. Laus’ exceptional leadership, he was appointed as the president of the state-owned Clark Development Corporation (CDC). His stint here from 2006 to 2008 widened the stage for a new wave of investors in Clark. Prior to holding the CDC presidency, Mr. Laus served as the director of Bases Conversion and Development Authority.

Despite Mr. Laus’ success, his commitment to community development remained evident. During the Mount Pinatubo eruption in 1991, for instance, Mr. Laus led concerned city residents in organizing a disaster management group called Save San Fernando Movement. The group became instrumental in bringing together government leaders, businessmen, and other members of civil society to push the government for the construction of a protective dike that would stop lahar on its tracks, thus, saving the capital town from further destruction.

As a visionary man, imbued with the value of hard work, challenged by innovation, and inspired by the love for his hometown, it is not surprising that Mr. Laus was regarded as one the most accomplished and most awarded Filipino businessmen of his generation.

Among the prestigious accolades and recognitions Mr. Laus received through the years were the Most Distinguished Alumnus in the field of business given by the Don Bosco Academy in 1983; the Most Outstanding Kapampangan in the field of business with civic consciousness by the province of Pampanga in 1991; the Presidential Medal of Merit from former president Gloria Macapagal-Arroyo in 2005; the Outstanding Alumnus by the Don Bosco Academy on its 50th Anniversary and the Blessed Philipp Rinaldi Servant Leader from the Salesians of Don Bosco Philippines in 2007; the Most Distinguished Bedan by the San Beda College Alumni Association, and the Outstanding Achievement Award from the CDC in 2008; the Outstanding Fernandino in the field of business and entrepreneurship by the City of San Fernando in 2009; and the Distinguished Bosconian Alumnus given by Don Bosco Academy in 2016.

The inspiring life story of Mr. Laus, however, came to an end when a private helicopter carrying him, together with two others, crashed into a fishpond in Malolos, Bulacan in noontime of April 25. Mr. Laus was declared dead on arrival.

The untimely demise of the Pampanga-based businessman, who is fondly called “Levy” by his family and friends and “LPL” by his colleagues and associates, left those closest to his heart in shock. Tributes for him and sympathies for his families poured in.

“Mr. Laus will always be remembered as the man who led efforts to save thousands of jobs in Clark as he headed the lobby and passage of the Freeport Law or R.A. 9400 which effectively institutionalized incentives that made investors and locators to stay in Clark,” the CDC said in a statement.

The state-owned firm noted that Mr. Laus’ efforts impacted not just Clark workers but the whole country as well because of the freeport’s undisrupted contribution to the nation’s economy.

“Sir Levy, your legacy lives on in Clark,” the CDC concluded.

Meanwhile, in an official statement of the LausGroup, the firm said that Mr. Laus’ untimely passing unfortunately came at a time when he was looking forward to greater things, not only for the company but also for the province of Pampanga as a whole.

“He will be remembered for his love of and dedication to the LGC as a group of companies, as a brand, as a family. He will be greatly missed,” the LausGroup said. — Mark Louis F. Ferrolino

The business empire of Levy Laus

The LausGroup of Companies that the late Liberator “Levy” P. Laus founded and led until his untimely death last April 25 has come a long way from its modest beginnings more than four decades ago. This might not have been possible if not for his hard work, dedication, passion, and  business acumen.

The conglomerate started as a small subdealer called Carworld in 1978, operating from a bare office in San Fernando, Pampanga. Over the years, that subdealer expanded into a network of dealerships that grew increasingly large, so much so that there are now more than 50 of those dealerships located in Central Luzon, Northern Luzon, and Metro Manila.

Carworld, Inc. is now the flagship company of LausGroup. According to its Web site, it has contributed to the transformation of its surrounding communities into robust business districts. “Its stature is a manifestation of the economic stability and countryside development in the region,” the site adds.

Carmix, a sister company of Carworld that has been operating for decades, is also successful in its niche. It retails quality and affordable secondhand vehicles and provides trade-in options and financial assistance to its customers.

Automotive dealership remains the core business of the conglomerate. The range of the brands the LausAutoGroup carries is vast, including Mitsubishi, Ford, Hyundai, Chevrolet, BMW, Volkswagen, Jeep, Peugeot, Kia, Mazda, Nissan, Suzuki, Foton, and Haima. Not only does it sell passenger vehicles, but also trucks and buses. The conglomerate’s Web site says that it is “the biggest and fastest growing auto dealership in the country,” with over 98 business units and more than 2,100 employees.

The other automotive-related businesses of LausGroup include Comtrust Finance and Investment Corporation (Laus Auto Finance), which is engaged in auto loan financing and check discounting; Laus Marketing and Trading Corporation, which sells Voltronic motor oils and lubricants; and Laus Auto Services, which offers maintenance and repair services for all cars of all makes and models.

In 2018, a publication named Mr. Laus one of the 33 most influential persons in the Philippine automotive industry.

“Through the years, the LausGroup has remained committed to its core values of customer satisfaction, honesty & integrity, hard work and productivity, efficiency, and social responsibility. Its success is fueled not only by its passion for cars but also the passion of its people to provide the best service to its customers, a tradition that continues to transform the way every dealership conducts business,” the conglomerate’s site says.

The conglomerate is a force to reckon with not only in the automotive industry but also in other fields, like insurance. Corporate Guarantee and Insurance Company (CGIC) is a non-insurance firm that Mr. Laus founded in 1997 that offers a variety of non-life insurance products (fire, personal accident, casualty, motor, marine and bonds).

It is one of the biggest non-life insurance companies in the country. According to data from the Insurance Commission, in 2017, CGIC ranked 20th in terms of net income (P73 million), 21st in terms of net worth (P862 million), 27th in terms of premiums earned (P442 million), 28th in terms of assets (P1.519 trillion), and 41st in terms of invested assets (P487 million).

Since its inception, the firm has also garnered distinctions, including ISO 9001:2000, ISO 9001:2008, and ISO 9001:2015 certifications for quality management system. In 2011, at the 1st Philippine Insurers and Reinsurers Association Awards, the “Best in Corporate Social Responsibility” award went to CGIC.

“To this day, CGIC continues to conform to global standards, offering services that are, indeed, certifiably world-class,” the non-life insurer’s Web site says. The company’s base of operations is San Fernando, and maintains offices in Metro Manila, Bulacan, Pangasinan and Tarlac.

LausGroup has its own media businesses: radio station RW 95.1 FM, Stun.Star Pampanga and CLTV 36, a regional television network.

The conglomerate’s portfolio also includes LausGroup Event Centre (LEC), which was inaugurated in 2016 and boasts state-of-the-art facilities. It’s where all sorts of events, from conferences to concerts to private functions, are held, and it serves as the main venue for LausGroup’s product launchings and multi-brand auto dealerships.

The group also owns the four-story Microtel by Wyndham Pampanga, which was developed in partnership with Phinma Microtel Hotels, Inc. The hotel, which is a short distance from LEC, has 80 furnished rooms and amenities like a swimming pool and function rooms. There’s also a shuttle service available to the hotel’s guests to and from a nearby mall.

“Consistent with its corporate advocacy of championing countryside development, the LausGroup has slowly but surely expanded to the north, opening new dealerships and eyeing other viable businesses to sustain and spur growth and progress wherever it goes,” the conglomerate’s site says.

An automotive powerhouse

At the core of the LausGroup of Companies owned by the late multi-awarded entrepreneur Liberato “Levy” P. Laus is the LausAutoGroup, a multi-brand automotive network that has made a name in giving first-class sales and after-sales service to customers.

From Mr. Laus’ humble beginnings in the automotive industry when he founded a once small allied subdealer Carworld, Inc. in 1978, the LausAutoGroup has expanded into a network of automotive dealers dispersed in 40 branches covering three regions — Northern and Central Luzon, and Metro Manila.

LausAutoGroup offers 17 car brands, namely Mitsubishi, Ford, Hyundai, Chevrolet, BMW, Volkswagen, Kia, Suzuki, Nissan, Haima, Mazda, Foton, Fuso, Peugeot, Jeep, Changhe, and Piaggo Apé.

For almost four decades of offering excellent service, the LausAutoGroup has made its mark in automotive dealership. Its founder’s passion for cars and customer care has brought the company distinctions in both sales and after-sales categories, which is evident by the awards and recognitions it earned through the years.

The automotive network also has a local business for quality second-hand cars. Carmix, LausAutoGroup’s mixed-used auto dealership arm, made a name as a trusted source of affordable pre-owned automobiles. It also offers trade-in options and auto financing assistance on all its vehicles.

Moreover, LausAutoGroup has other ancillary business units that aptly supplement the services of its auto dealership companies.

The group operates Laus Auto Services, a multi-brand service center located at Clark Freeport Zone that offers general jobs, body paint, and collision repair services to cars of all builds and brands.

Corporate Guarantee and Insurance Company (CGIC) provides insurance coverage for motor, fire, personal accident, casualty, marine, and bonds. Its website states that it is one of the top 25 non-life insurance companies in the country. It also has an IS0 9001:2015 certification, after earning two earlier certifications.

Comtrust Finance and Investment Corporation, more known as Laus Auto Finance, offers auto loan financing, check-discounting, and credit investigation services.

From a tire and service center, Tire City Goodyear Autocare now serves as a complete one-stop auto care hub that also covers services such as under chassis and wheel alignments, brakes, cooling system checks, electrical and body works, and painting. The LausAutoGroup is also a distributor of Yokohama tires through Tire City Yokohama Pampanga.

Located along McArthur Highway in San Fernando, Pampanga, Carworld Caltex is a highly regarded business for its enhanced services that it was even awarded a Caltex Mystery Motorist Award, a citation they received after having scored 100% in customer satisfaction.

Another auto partner of the group is the Laus Marketing and Trading Corp., the distributor of Voltronic, a well-established brand of motor oil and lubricants from Germany. It also distributes the Auto Flood Protector, a cylindrical film tube that shields cars, trucks, SUV, and other furniture and prized possessions from rapid flood or water overflow.

Hüper Optik Philippines, another subsidiary of the group, is the country’s distributor of Hüper Optik, maker of the world’s first nano-ceramic multi-layer window films. — Adrian Paul B. Conoza

BSP cuts big banks’ reserve requirement

By Reicelene Joy N. Ignacio
Reporter

FRESH from slashing benchmark interest rates just a week ago by 25 basis points in the face of easing inflation and slowing economic growth, the Bangko Sentral ng Pilipinas (BSP) on Thursday fired off a 200-basis-point (bp) phased reduction in big banks’ reserve requirement ratio (RRR).

The move follows a cumulative 200 bp RRR cut last year to 18%, described by BSP Governor Benjamin E. Diokno in his first press briefing in his current post early last March as still “really high.”

“The Monetary Board decided today to reduce the RRR by 200 bps — from 18% to 16% — to be implemented in three stages: 100bps effective May 31, 50bps effective June 28 and 50bps effective July 26,” Mr. Diokno told reporters in a mobile phone message, adding: “This new policy will apply to universal and commercial banks only.”

“For the other types of banks, the cut in RRR will be considered in the next MB meeting.”

He said on March 12 that RRR cuts could amount to “one percentage point every quarter for the next four quarters.”

Asked if more cuts can be expected this year, BSP Deputy Governor Diwa C. Guinigundo said in a text message: “Not sure.”

“Depends on system liquidity in the near future and outlook on inflation.”

The BSP estimates that each percentage point cut releases P90-100 billion into the economy.

Headline inflation slowed for the sixth straight month to a 16-month-low three percent in April after the pace picked up for nine straight months to a nine-year-high 6.7% in September 2018 that was sustained in October. Year-to-date inflation has averaged 3.6% — within the BSP’s 2-4% target range though still above a 2.9% full-year forecast average, after 2018’s decade-high 5.2%.

In a May 16 note, Euben Paracuelles, Nomura’s senior economist for Southeast Asia, said while the BSP did not explain its latest “relatively aggressive” policy step, “this is likely a response to the tightening of liquidity conditions, which may ultimately affect the growth outlook if left unchecked.”

“While BSP also did not provide any forward guidance, we believe this was part of BSP’s medium-term goal… to reduce the level of the RRR to single digits by 2023 at the end of Diokno’s term,” he added. “This implies at least 200bp of RRR cuts per year until 2023…”

“However, we think the pace of the cuts could also be accelerated, given BSP’s new charter allows it to issue its own debt instruments as a tool for monetary operations, in addition to the term deposit facility to absorb excess liquidity under its interest rate corridor framework…”

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said via text, “This is very good for the financial system”, explaining that “[m]ore funds are freed up for economic activities and expansion.”

Michael L. Ricafort, economist of the Rizal Commercial Banking Corp., said in a separate text that “[t]he latest cut in large banks’ RRR, by a total of 2 percentage points to 16%, would increase peso liquidity in the local financial system by a total of about P180 billion.”

“Thus, local interest rate benchmarks… would fundamentally go down/ease,” he added.

“The latest RRR cut should be generally positive for the local financial markets and the economy in terms of greater amount of funds/loans to be made available by banks to consumers/households and businesses, which spur greater economic activities and faster gross domestic product (GDP) growth.”

Nicholas Antonio T. Mapa, ING Bank N.V. Manila’s senior economist, said that “[w]ith inflation gliding back to within target and expected to remain benign well into 2020, this was the perfect opportunity for the BSP to cut both the policy rate and reduce RRR, more so with GDP dropping to [a four-year-low] 5.6% [in the first quarter].”

PHL raises $363.3M from ‘panda’ bond sale

THE PHILIPPINES raised 2.5 billion renminbi ($363.3 million) from its second sale of so-called “panda” bonds that saw strong demand from investors, the Treasury bureau and the Bank of China, sole underwriter for the exercise, announced in separate statements.

In a statement sent to reporters late on Wednesday, the Bureau of the Treasury said the three-year debt papers fetched a 3.58% coupon that represented “a tight spread of 32 basis points above the benchmark.”

The order book reached a total of some RMB11.25 billion — resulting in the issue being 4.5 times oversubscribed, according to the Bank of China — “reinforcing a strong vote of confidence in the Republic’s economic stewardship and transformative reform agenda,” the Treasury said.

“The success of the second ‘panda’ bond float, which has come on the heels of the similarly well-received float of Euro-denominated offshore securities, illustrates the high level of confidence of the international markets in the Philippines amid… game-changing reforms… to sustain its upward growth trajectory and attract more investments,” the Treasury quoted Finance Secretary Carlos G. Dominguez III as saying.

“Such confidence by the global investor community stems from our solid creditworthiness brought about by the government’s unwavering commitment to sound macroeconomic policies and fiscal discipline in the face of domestic and external challenges.”

S&P Global Ratings last April 30 raised the Philippines’ credit rating by a notch to “BBB+” — its best debt score yet — citing above-average growth and strong external and fiscal position which have boosted the country’s economic profile. Fitch Ratings, Inc. and Moody’s Investors Service have kept the country’s rating a notch above minimum investment grade at “BBB” and “Baa2”, respectively, while China Linahe Credit Rating Company Ltd has given the Philippines its highest rating of “AAA”.

The same Treasury statement quoted National Treasurer Rosalia V. De Leon as saying: “The success of our ‘panda’ bonds issuance, along with other recent issuances, resonates the positive market sentiment on Philippine credit.”

“Through strategic and timely offerings, we are able to tap various markets even in a challenging environment that allowed for the Republic that resulted in more cost-efficient pricing.”

Noting in a separate statement that “the Philippines is… becoming a strong player in this… ‘panda’ bond market, largely due to its improved creditworthiness”, Deng Jun, country head of Bank of China Manila, said the sale’s“overwhelming success” serves “our two countries’ shared vision of improving infrastructure and providing better opportunities for Filipino and Chinese businesses.”

In terms of geographic breakdown, Chinese investors accounted for 42.4% of placements while those elsewhere accounted for 57.6%.

Bank of China said Hong Kong was the biggest source of accepted bids, accounting for RMB1.26 billion, followed by China (RMB1.06 billion), Europe (RMB140 million RMB) and in the Philippines (40 million RMB).

The Philippines made its first foray into the “panda” bond market in March 2018, raising RMB1.46 billion ($230 million) in three-year papers with a five percent coupon after an offer that was 6.32 times oversubscribed.

Last week, the government raised €750 million in eight-year global bonds with a 0.875% coupon and priced 70 basis points over benchmark. That offer involved the first euro-denominated bonds issued by the Philippines in more than a decade.

The Philippines also sold $1.5 billion in 10-year offshore dollar bonds in January.

The Philippines, one of Asia’s most active sovereign bond issuers, plans to borrow P1.189 trillion this year, 75% of which will be sourced domestically while the balance will be from foreign creditors. Funds will be used to fund a budget deficit programmed at P624.4 billion, equivalent to 3.2% of gross domestic product, and support increased government spending programmed at P3.774 trillion.

The government is also looking at offering “samurai” bonds amounting to $1-1.5 billion in yen equivalent some time next semester, as well as another round of dollar-denominated global bonds. — Karl Angelo N. Vidal

Six Philippine listed companies land on Forbes Global 2000 list

THE SAME SIX local firms made it to the latest Forbes Global 2000 list of the world’s biggest, most powerful and most valuable public companies.

Sy-led lender BDO Unibank, Inc. led the Philippine firms that landed on the 17th annual list of Forbes magazine which ranks international firms on the basis of sales, profits, assets and market value.

BDO climbed to 1,018th spot this year from 1,072nd place in 2018. Its market value stood at $11.2 billion, assets at $57.5 billion and profits at $621 million.

The Sy family’s holding firm, SM Investments Corp., followed in 1,092nd place, dropping from 883rd spot last year.

Top Frontier Investment Holdings, Inc., the biggest shareholder of San Miguel Corp., climbed to 1,196th spot from 1,210th.

Meanwhile, the country’s oldest conglomerate Ayala Corp. fell to 1,236th spot from 1,216th.

Metropolitan Bank & Trust Co., the listed lender of late tycoon George S.K. Ty, improved its ranking to 1,639th from 1,750th last year, while Gokongwei-led JG Summit Holdings, Inc. tumbled to 1,720th position from 1,506th.

The six Philippine firms join the elite list of 2,000 companies with a total of $41.2 trillion in revenues, $3.4 trillion in profits, $186.7 trillion in assets and $56.8 trillion in market capitalization.

“Businesses across the globe have experienced an exceedingly strong year, and since the most recent Global 2000 list, companies featured have seen steady increases in overall revenues, profits and market cap,” Forbes said in a statement.

“Banks and diversified financials had another particularly good year, with the majority of US banks noticing an increase in profits due largely to a recent suite of tax cuts. The M&A sector also underwent a number of significant business moves, with the $78.3-billion acquisition of Time Warner by AT&T topping the list.”

The Industrial & Commercial Bank of China topped the list for the seventh straight year, being the only firm exceeding the $4,000-trillion mark in terms of assets at $4,034.5.

JPMorgan Chase & Co. overtook China Construction Bank to take second spot, while the Agricultural Bank of China settled in fourth place. The Bank of China ranked eighth, rounding out China’s “Big Four” banks in the top 10.

Bank of America landed the fifth spot, followed by tech giant Apple at number six, Ping An Insurance at seventh place, Royal Dutch Shell at number nine and Wells Fargo at 10th spot.

This year marks the first time since 2010 that billionaire Warren Buffett-led Berkshire Hathaway was kicked out of the top 10, spiraling down 22 places to end at the 26th spot. Forbes said this was due to a “rare loss” in the fourth quarter of 2018.

Forbes ranks the companies by grading them on four metrics: sales, profits, assets, and market value. Each company’s scores are added up to come up with a composite score, which is then ranked from highest to lowest. — Arra B. Francia

Filinvest Dev’t Q1 income surges to P2.8B

By Arra B. Francia, Senior Reporter

EARNINGS of Filinvest Development Corp. (FDC) surged 61% in the first quarter of 2019, following the strong performance of its property, banking, and power businesses.

The Gotianun-led conglomerate’s regulatory filing on Thursday showed that net income attributable to the parent rose to P2.77 billion in the three months ending March, against P1.72 billion in the same period a year ago.

This came after a 17% increase in revenues to P18.52 billion, versus P15.76 billion in the same period a year ago.

FDC’s banking unit contributed 41.1% of total revenues, followed by real estate operations with 37%. Operations of its power, sugar, and hotel accounted for 12.3%, 4.9%, and 4.7%, respectively.

East West Banking Corp. saw its net income climb 34% to P1.23 billion during the quarter, after revenues also firmed up by 30.9% to P8.76 billion. The listed lender attributed the increase to the improved lending and trading gains.

Fees and other income jumped 24.1% to P1.41 billion, while foreign exchange and trading gains were almost five times higher to P525.1 million during the period.

For Filinvest Land, Inc. (FLI), revenues went up 11.8% to P8.08 billion, driving the 19.6% increase in net income to P2.06 billion.

FLI benefited from the completion of more office spaces last year, which started contributing to its financials this quarter. Mall and office leasing revenues jumped 37.6% to P1.87 billion, while real estate sales added 6.3% to P5.75 billion.

Meanwhile, FDC’s power business recorded strong contributions from its coal power plant and retail electricity operations. Net income soared 125.4% to P654.2 million, while revenues gained 25.7% to P2.36 billion.

Sugar operations contributed P212.2 million for the period, about seven times higher than the P30.9 million it generated in the first quarter of 2018. Higher sales volume and sales prices pushed revenues 21.2% higher to P912.7 million.

FDC continued to see growth for its hotel operations, as Quest Clark in Pampanga saw higher levels of occupancy, alongside higher average room rates in Crimson Mactan in Cebu. Crimson Boracay also started contributing to revenues after its soft opening last year. Net income then increased 82.5% to P148.1 million, following a 30.2% uptick in revenues to P883.7 million.

The company earlier disclosed that it will spend up to P38.9 billion in capital expenditures for the year, a big chunk of which will be used to expand its hotel operations in Clark, Pampanga.

“We start a new phase in the FDC story with our entry into infrastructure and logistics parks in New Clark City. Not only will these provide balance to our more cyclical property and banking segments and add another layer of diversity to our income mix, but these will also complement existing investments in the dynamic Clark corridor,” FDC President and Chief Executive Officer Josephine G. Yap said in a statement.

FDC has 2,600 additional keys across 10 new hotels in the pipeline, as it targets to have 5,000 keys under management by 2023.

Shares in FDC jumped 1.49% or 20 centavos to close at P13.66 each at the stock exchange on Thursday.

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