Boss UP among four investment groups flagged by SEC

June 1, 2020 | 12:03 am

THE Securities and Exchange Commission (SEC) is warning the public against four groups that are offering investment opportunities without authorization from the government.

In separate advisories on its website, the corporate regulator identified four unlicensed investment operators that the public must watch out for: Boss Ultimate Program (Boss UP), IPayOutWeekly/IP Weekly Advertising Services, Commodore Agri-Ventures Holding Corp. and XM Trading Marketing Services/XM Trading Official.

It said all of them do not have the secondary license required by the SEC for anyone soliciting investments from the public.

Boss UP, which the SEC said is run through the collaboration of Building Our Success Stories Network, Inc. (BOSS Network) and 101Upper Class Corp. (Upperclass), engages in multi-level marketing.

The group offers 10 ways to earn, most of which rely on referrals and bonuses which the SEC classified as selling securities to the public. Under the Securities Regulation Code, such activity requires that a company has a secondary license from the SEC.

The SEC said BOSS Network and Upperclass are both registered as corporations with the commission. However, their joint venture Boss UP is unregistered and none of them has a secondary license to sell securities.

Similarly, IPayOutWeekly is not registered with the SEC and does not have a secondary license to sell securities. The SEC said it operates by enticing the public to invest P1,000 in exchange of P1,400 in seven days.

The group claims it is registered with the Department of Trade and Industry under the name IP Weekly Advertising Services. But the SEC said it has no records with the commission, which regulates the solicitation of investments.

Commodore Agri-Ventures also offers easy-money by inviting individuals to become “shareholders” starting with a P3,500 investment, after which they are guaranteed a payout of 10% of shares in one to two weeks.

The SEC said the company is registered as a corporation, but did not secure the secondary license needed to offer, solicit, sell or distribute securities.

Lastly, XM Trading operates by promising investors, which it also calls “shareholders,” a 25% profit of their investment capital every 20 days. It claims involvement in pro-gaming advertising, cryptocurrency, foreign exchange trading, perfume manufacturing and wholesale, and car loan financing, among others.

But the SEC said XM Trading is neither registered with the commission nor does it have a license to sell securities, making its operations unauthorized.

The SEC warned the public not to invest or stop investing in these four groups as they violate the Securities Regulation Code. Anyone that acted as salesmen, brokers, dealers or agents for these groups may be penalized with a fine of up to P5 million, imprisonment of up to 21 years, or both. — Denise A. Valdez

Budget airlines’ local flights, PAL int’l flights resume

June 1, 2020 | 12:02 am

PHILIPPINES AirAsia, Inc. announced on Sunday that it will operate a total of 18 domestic commercial flights when it resumes on Wednesday, June 3.

The Civil Aeronautics Board (CAB) instructed airlines on Saturday to cancel their flights on June 1 as the Inter-Agency Task Force on Emerging Infectious Diseases (IATF-EID) had yet to approve their proposed routes for domestic air services for the first week of the month.

“AirAsia is set to gradually resume services in the Philippines on 3 June following the Philippine government’s directive of easing community quarantine restrictions in Metro Manila and several parts of the country,” the low-cost carrier said in an advisory.

It said the resumption of its commercial flights will initially be for domestic routes and will gradually increase to include international destinations in July.

The airline also said there will be 12 commercial flights between its hubs in Manila and Cebu, Davao, Tacloban, Cagayan de Oro, Bacolod, and Tagbilaran.

It will operate six flights between Clark and Tacloban, Cagayan de Oro, and Davao hubs.

AirAsia’s operations for domestic flights will be temporarily moved from Terminal 4 to Terminal 3 of the Ninoy Aquino International Airport (NAIA).

“The temporary suspension of Terminal 4 operations is until further notice by airport authorities,” it said.

Philippines AirAsia Chief Executive Officer Ricardo P. Isla was quoted as saying: “During the hibernation of our fleet, we took the time to step up our handling procedures to ensure that our guests have a swift and safe journey with us.”

“Needless to say, we are well prepared to welcome everyone onboard. As we resume our services around our network, AirAsia is determined to help rebuild our economy and country,” he added.

CEBU PACIFIC
Cebu Pacific, operated by Cebu Air, Inc., and its subsidiary Cebgo said on Saturday that they will resume their domestic passenger flights beginning Tuesday.

The Gokongwei-led airlines will be operating flights between Manila and General Santos, Naga, Cagayan de Oro, and Cebu from June 2 to June 4. In Manila, all their flights will depart and arrive at the NAIA Terminal 3.

The budget airlines also reminded the public that leisure travel is not yet being allowed by the government.

Passengers should also check the guidelines from the IATF-EID and coordinate with the local governments of their origin and destination for the necessary documents when travelling.

PHILIPPINE AIRLINES
Also on Saturday, flag carrier Philippine Airlines, operated by PAL Holdings, Inc., said that it will begin resuming its domestic passenger flights on June 8 instead of June 1, which it had initially announced last Friday before CAB’s advisory.

PAL will operate flights between Manila and Basco, Laoag, Legazpi, Puerto Princesa, Busuanga, Bacolod, Cebu, Dumaguete, Iloilo, Kalibo, Caticlan, Roxas, Tacloban, Tagbilaran, Butuan, Cotabato, Cagayan de Oro, Dipolog, Davao, General Santos, Ozamis, Pagadian, and Zamboanga.

There will also be flights between Cebu and Davao effective June 8.

PAL will also resume operating limited international services on June 1.

The flag carrier is set to operate flights between Manila and San Francisco starting June 1; followed by Singapore on June 3; Los Angeles on June 8; Vancouver and Toronto on June 10; New York on June 11; Guam on June 12; Honolulu Jakarta, and Kuala Lumpur on June 13; Ho Chi Minh, Doha, Dubai, Dammam, and Riyadh on June 15; Taipei on June 16; Xiamen on June 17; Hong Kong on June 19; and Tokyo, Osaka, and Nagoya on June 22. — Arjay L. Balinbin

Philippines opens market to US cattle embryos

June 1, 2020 | 12:02 am

THE Philippines has opened its market to cattle embryos from the US, with sales estimated at $400,000 within the year, the United States Department of Agriculture (USDA) said.

In a report, the USDA said the Philippines formally granted market access to US bovine embryos on May 19, which levelled the playing field for US exporters against their competition in Australia and Canada.

The USDA said embryo sales will go mainly to the dairy industry and to agricultural colleges and research institutions.

The report said opportunities for embryo use by the beef industry are currently limited.

However, the USDA said the Philippine market for embryos has potential over the medium term.

“Opportunities for increased sales may open up in the next two to three years with new government initiatives being implemented in an effort to expand local beef and dairy production,” the USDA said.

The USDA’s Animal Plant Health Inspection Service and the Philippines’ Bureau of Animal Industry (BAI) have finalized the health protocols for imports of bovine embryos.

Licensed importers must secure a Sanitary and Phytosanitary Import Clearance (SPSIC) from the BAI.

“Products must not be shipped for export before the SPSIC’s issuance, yet must be shipped no later than 60 days following its issuance,” the USDA said.

The USDA said the Most Favored Nation tariff rate for bovine embryos is 1%.

“However, importers may receive a zero duty under the Agriculture and Fisheries Modernization Act, subject to submission of a Certificate of Eligibility or Certificate of Accreditation, issued by the Department of Agriculture,” the USDA said.

As of January 1, the Philippines’ total cattle inventory is about 2.55 million head, the USDA estimated. — Revin Mikhael D. Ochave

Yields on government debt drop on BSP bets

June 1, 2020 | 12:02 am

By Jobo E. Hernandez, Researcher

YIELDS ON government securities (GS) fell last week on expectations of rate cuts from the Bangko Sentral ng Pilipinas (BSP) and safe-haven demand due to lingering tensions in Hong Kong.

GS yields dropped by an average of 14.3 basis points (bps) week on week, based on the PHP Bloomberg Valuation Service Reference Rates as of May 29 published on the Philippine Dealing System’s website.

At the secondary market, GS yields fell across-the-board at the close of trading last Friday. The 91-, 182-, and 364-day Treasury bills (T-bills) declined by 4.8 bps, 6.7 bps, and 11.5 bps, respectively, to yield 2.08%, 2.186%, and 2.512%.

At the belly of the curve, yields on the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) also fell by 19.6 bps (2.54%), 21.8 bps (2.607%), 20.6 bps (2.674%), 17.5 bps (2.756%), and 12.4 bps (2.949%), respectively.

Rates of the 10-, 20- and 25-year T-bonds likewise went down 11.9 bps, 23.8 bps, and 6.4 bps from the previous week to 3.155%, 3.949% and 4.224%, respectively.

“Philippine GS continued to rally across the curve over strong liquidity and dovish remarks from BSP Governor [Benjamin E.] Diokno,” First Metro Asset Management, Inc. (FAMI) said in an e-mail.

FAMI also noted the full award of the reissued T-bonds offered last Wednesday.

“The 5-year and below space continued to see strong demand as the reissuance of FXTN 5-76 received P118.42 billion versus the P30-billion offer. This led to an additional tap of P20 billion at an average yield of 2.676% — 134.2 bps lower than the 4.018% rate in the last March 3 auction,” FAMI said.

“The Treasury also released their borrowing plan for June, retaining auction volumes and offering the same bond tenors of 3- and 5-year papers. The June auction size brings total borrowing [in the second-quarter] to P530 billion,” it added.

In a separate e-mail, a bond trader attributed the fall in GS yields to “safe-haven demand” amid escalating US-China tensions over the political situation in Hong Kong, as well as market expectations of a BSP policy rate cut in its meeting on June 25.

Last Tuesday, Mr. Diokno said among the factors they will consider at the Monetary Board’s June 25 meeting include May inflation data, the first-quarter gross domestic product (GDP) report and “high-frequency indicators” such as the purchasing managers’ index, trade, and the number of flights and passengers, which will be used to gauge if there will be a pickup in transport and tourism when the lockdown is lifted.

Headline inflation stood at 2.2% in April, marking the third consecutive month of a slower rise in prices of commodities. Last month’s decline was on the back of lower oil prices and other non-food items.

May inflation data will be reported by the Philippine Statistics Authority on Friday.

Meanwhile, first-quarter GDP dropped by 0.2%, the first contraction since the three percent fall recorded in the fourth quarter of 1998. Economic managers now expect the economy to shrink by 2-3.4% on expectations of a worse fallout due to the pandemic.

Abroad, China approved on Thursday a new national security legislation for Hong Kong that seeks to, among others, criminalize acts that threaten national security in the semiautonomous city such as subversion and secession. Earlier, the US has threatened to impose sanctions on Hong Kong and mainland China if the security law is passed.

“Yields might continue to decline [this] week amid likely weaker Philippine inflation for May 2020 and expectations of downbeat US labor reports, including hints of more monetary easing from the European Central Bank,” the bond trader said.

For FAMI: “We see strong interest in the front-end to steepen the curve further.”

“May inflation print should remain within the BSP forecasts of 1.9-2.7% albeit price pressures on agricultural products due to typhoon Ambo. We see that the highly liquid market and accommodative monetary measures will sustain current levels across the curve for now,” FAMI said.

Nissan looking to leverage Mitsubishi PHL factory for production

June 1, 2020 | 12:02 am

NISSAN MOTOR CO. LTD. is looking to rein in costs and mitigate the business effects of COVID-19 by taking a long hard look at its operations. Part of its vision may entail Nissan vehicles rolling out of a Mitsubishi production line here.

In a press conference streamed via YouTube, the Japan-headquartered automaker revealed its four-year plan “to achieve sustainable growth, financial stability and profitability by the end of fiscal year 2023.” Amid impending sweeping changes in the Japan-headquartered company, its management team is looking at leveraging its partnerships in the region in the wake of its “rationalization to restructure, reduce costs, and improve efficiency.”

Said Nissan COO Ashwani Gupta, “Asia is a great market for us in terms of customers… products (and) partners which we have in this region. However, when we look at our capability and capacity to cater to the demand of this region, we do believe that we need a partner who is much stronger than us in this region.”

Nissan revealed it will be shuttering its Indonesia manufacturing facility, along with its Barcelona factory, and then leverage its Thailand plant as a production base.

Mr. Gupta continued, “As far as Nissan is concerned, we are going to use (the) Thailand plant for Asia, ASEAN, (and) for exports (to) other parts of the world.”

As far as the Philippines is concerned, Nissan is looking to partner with Mitsubishi Motors Philippines Corp. “Our second biggest market in ASEAN is the Philippines where we enjoy great market share on the frame-based SUV and frame-based pickup,” the executive said. “We don’t have a plant today, and we are now studying with Mitsubishi to utilize (its) plant in (the) Philippines so that we can localize our great products in the Philippines.”

Part of the company’s rationalization moves include “rightsizing” production capacity by 20% to 5.4 million vehicles per year, upping plant utilization rate to more than 80% toward more profitable operations, shrinking the global lineup of cars from 69 to 55 models, reducing fixed costs by around 300 billion yen, and, yes, looking at alliance partners to share resources. Nissan will focus on what it calls “global core model segments, including enhanced C- and D-segment vehicles,” according to a release.

Nissan President and CEO Makoto Uchida also revealed the company’s move to prioritize core markets and core products. Three key markets were identified as Japan, China, and North America. Nissan has also decided to exit South Korea, and terminate its Datsun business in Russia.

Despite the consolidation moves, the company plans to “introduce 12 models in the next 18 months,” and grow its portfolio of electric vehicles and electric motor-driven cars… with “more than one million electrified sales units expected a year by (the) end of FY 2023.” — KMA

Covering up stylishly

June 1, 2020 | 12:02 am

THE virus strips away a little bit of ourselves every day — including half our faces. When our faces are covered, how can we continue to express ourselves? For some designers, the answer is chic face masks.

At a time like this masks allow a certain freedom. As Chuck Palahniuk writes in the novel Invisible Monsters: “In the way our world is, everybody shoulder to shoulder, people knowing everything about you at first glance, a good veil is your tinted limousine window. The unlisted number for your face. Behind a good veil, you could be anyone. A movie star. A saint.”

BusinessWorld has put together a listing of sources for stylish masks below, but note that since a lot of them are not medical grade, it may be best to wear a filter or a second surgical mask underneath them.

ATELIER DEBBIE CO
We love the toile du jouy masks of Debbie Co, which have a bit of a Gone With the Wind vibe to them. They’re made in washable cotton and printed in red, black, or blue, and might remind you of blue-and-white china. Other materials are also available, such as a set made of silk brocade. Prices vary, but the toile du jouy sets cost P950 for two. Order through Instagram @atelierdebbieco. Part of the proceeds will go towards donating PPEs to frontliners.

RHETT EALA
Esteemed designer Rhett Eala is also making face masks, costing P1,250 for a pack. Each pack contains five face masks in assorted fabrics and prints, but we’re keeping our fingers crossed that it includes the one in silk brocade, with a raised pattern of a peacock. For every purchase, P200 will be donated to select organizations to help feed the frontliners and families in need. Order through rhetteala.ph.

ZARAH JUAN
Designer Zarah Juan is known for using local textiles for her work, and her line of face masks wouldn’t be different. She has the Bagong Pag-Asa mask, a triple-layered mask made with indigenous fabric, with a nose-pinch wire, soft garters for the ears, and six non-woven filters. Order through Facebook @zarah821.

KELVIN MORALES
Designer Kelvin Morales, who we admire for his barongs, is releasing a line of masks embroidered with a Death’s-head hawkmoth (like in Silence of the Lambs). A portion of the sales will go to a charity helping out “no work, no pay” workers. Order through Instagram @kelvinmmorales.

BASIC MOVEMENT
For just the right amount of quirk, Basic Movement is offering masks printed with polka dots, or else eggs; or in denim. Several other patterns are also available. They are made by local brands such as Proudrace and Vina Romero, and a portion of the proceeds go toward providing N95 masks for frontliners. Order through Instagram @basicmovement.

BIBSISITA
The line of masks by local brand Bibsisita is made by local sewers in woven cotton. What makes them special are the little artworks printed on them, depicting quiet scenes with Filipinas. The masks have three layers of fabric, have a filter pocket, and are washable. Order through bibsisita.com.

MASABEL ILOCO
Made with the inabel fabric of Ilocos, the washable and reversible cotton masks in various patterns look cozy. The masks, made by local weavers, help support their continued livelihood. Order through Instagram @masabel.iloco.

FINO LEATHERWARE
La Mascherina, meaning “mask” in Italian, is a new line by Fino Leatherware suited for these times. It’s made with French calfskin and lined with sheepskin, and comes with two detachable and washable filters. Thirty percent of the sales’ proceeds go towards a fund for frontliners. Order through Instagram @finoleatherware. — Joseph L. Garcia

PNB announces annual meeting of stockholders via remote communication on June 23

June 1, 2020 | 12:01 am

Century Pacific Food, Inc. to conduct annual stockholders’ meeting via remote communication on June 30

June 1, 2020 | 12:01 am

Indonesia keeps palm oil, cocoa export taxes unchanged for June

June 1, 2020 | 12:01 am

JAKARTA — Indonesia will keep its export tax for crude palm oil at zero for a third month in June, the country’s trade ministry said in a statement on Friday.

The country’s cocoa export tax will also be kept at 5% in June.

Indonesia imposes its progressive export tax on crude palm oil based on the government’s reference price. The tax kicks in when the price goes above $750 a tonne.

The reference price in June was $568.94 a tonne, the ministry said, down from May’s $635.15

Based on existing regulation, the decline in reference price should mean crude palm oil exporters will not have to pay an additional levy.

Indonesia, the world’s biggest producer and exporter of palm oil, collects an additional export levy when the reference price is above $570.

Finance Minister Sri Mulyani Indrawati’s said earlier this month that the government planned to raise palm export levies by $5 to support the country’s biodiesel programme. — Reuters

Peso may depreciate against dollar on continued US-China tensions

June 1, 2020 | 12:01 am

THE PESO is likely to weaken this week as markets monitor ongoing tensions between the US and China as well as local developments including inflation and the virus spread.

The local unit finished closed at P50.61 to a dollar on Friday, appreciating by eight centavos from its P50.69 finish on Thursday, according to data from the Bankers Association of the Philippines.

It also strengthened by nine centavos week on week from its P50.70-per-dollar close last May 22.

A trader said the announcement of the easing of lockdown measures was a reprieve for market sentiment and to the peso despite the continued tensions between the US and China recently.

“The peso was the lone outperformer because the Philippines announced the transition of some areas to GCQ (general community quarantine) on Thursday night,” a trader said in a phone call.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said aside from the transition to GCQ, weak US data also boosted the peso.

“The peso closed stronger after weaker dollar recently versus global currencies after weak US economic data on durable goods and home sales,” Mr. Ricafort said in a text message.

For this week, the trader said market sentiment will be guided by developments related to the US-China trade tensions.

“Everything right now is fundamentally headline-driven,” the trader said, noting that US President Donald J. Trump’s statements will have an impact on currency trading in the following days.

Reuters reported that Mr. Trump said on Friday that his administration will start the process to remove the special treatment for Hong Kong, a retaliatory move after China’s plans to impose new security legislation in the special administrative region.

For his part, Mr. Ricafort said major catalysts for foreign exchange trading this week will be the trend of new virus infections in the country as well as inflation, among others.

A BusinessWorld poll of 17 economists yielded a median inflation estimate of 2.2% for May, with analysts citing the uptick in food prices and a modest rebound in oil prices.

This falls close to the lower end of the 1.9% to 2.7% estimate given by the central bank. It also compares to the 2.2% print in April and the 3.2% seen in May 2019.

The Philippine Statistics Authority will report May inflation data on June 5.

For this week, the trader expects the peso to trade between P50.40 to P50.90 versus the dollar, while Mr. Ricafort sees the local unit moving around the P50.40 to P50.85 levels. — L.W.T. Noble with Reuters

Suzuki PHL reopens most dealerships, gives ‘cost-efficient’ promotions

June 1, 2020 | 12:01 am

SUZUKI PHILIPPINES (SPH) reports that “a majority” of its dealerships have opened this month. These facilities are now ready for sales, after-sales services, and test drives. SPH said in a release that it “will continuously find ways to present customers with promos that are cost-efficient for interested vehicle buyers, including down payment policies and discounts.” Here are the reopened dealerships:

SPH recently reassured customers that dealerships will be following so-called SMART guidelines, encouraging personnel and customers to: sanitize thoroughly, maintain safe distancing, adhere strictly, reach people online, and think positive. For more information, visit www.suzuki.com.ph.

Market to watch case count as economy reopens

June 1, 2020 | 12:01 am

By Denise A. Valdez, Reporter

THE country’s ability to keep the number of coronavirus disease 2019 (COVID-19) cases low despite a relaxed lockdown will determine the movement of the market this week.

The benchmark Philippine Stock Exchange index (PSEi) soared on Friday to 5,838.84, up by 268.62 points or 4.82% from the previous day’s close.

After ending the week in green territory for three out of four trading days, the PSEi rose 5.4% on a weekly basis.

The anticipation and the eventual confirmation of easing quarantine measures in Metro Manila boosted market confidence last week. Value turnover surged 121% to an average of P8.88 billion. Net foreign outflows went down 34% to an average of P227.71 million.

“Currently, the local market is enjoying the optimism stemming from the easing of restrictions here in the Philippines,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a text message on Sunday.

“Our major regions in terms of economic contribution are now allowed with more economic activities. The said optimism has even brought the market above its 5,700 resistance level,” he added.

As President Rodrigo R. Duterte relaxed the lockdown in Metro Manila starting June 1, industries and government offices are set to resume work. This is expected to kick off the economy’s recovery after a lockdown of over two months, which resulted in a 0.2% gross domestic product (GDP) contraction in the first quarter.

However, several sectors are wary about the decision as local COVID-19 cases continue to rise. The Health department said there were 17,224 COVID-19 cases in the Philippines as of Saturday, of which 12,466 are active and the rest have either recovered or died.

Mr. Tantiangco said sustaining investor optimism would depend on local developments regarding the spread of the virus.

“(This) week, the number of new coronavirus cases here in the country would be monitored to see if the downgrading of restrictions has brought an unwanted consequence namely, a further spread of the virus. If so, the local market could fall below the 5,700 level again,” he said.

Online brokerage 2TradeAsia.com said the market may still rise as investors hold on to hopes of economic recovery.

“Having run above 5,700 on good volume last Friday, eyes are set on the PSEi’s ability to move towards 6,000-6,500. Note overall that volatility remains in place, as sentiment remains hyped-up with several countries’ gradual transition in reviving business activity,” it said in a market note.

2TradeAsia.com said it is important for companies now to emphasize how they plan to boost revenue streams, such as by incorporating an e-commerce model.

2TradeAsia.com is putting immediate support within 5,700-5,750 and resistance within 5,900-6,000. Mr. Tantiango of Philstocks is setting the trading range from 5,700 to 6,100.