SMFB stock gets a lift amid expectations of easing inflation

April 22, 2019 | 12:05 am

EXPECTATIONS of better earnings this year led San Miguel Food and Beverage, Inc. (SMFB) shares to be among the most active last week.

This as investors see the listed food manufacturer as one of the stocks to benefit from the softening inflationary environment this year, according to analysts interviewed by BusinessWorld.

From April 15 to 17, Philippine Stock Exchange data showed a total of P543.33 million worth of 4.85 million SMFB shares having exchanged hands on the trading floor, making it the ninth most actively traded stock during the period.

SMFB shares closed at P113.8 apiece on Wednesday, up P1.8 or 1.61% from the previous day and April 12’s closing share price of P112. Year to date, it is up 38.78%.

“We think that investors are closely watching…the inflation data that has been easing down since the start of 2019… [investors] think that inflation will continue to go down thus margins for consumer companies like [SMFB] will recover this 2019,” said Philstocks Financial, Inc. Client Engagement Officer and Research Associate Piper Chaucer E. Tan in an e-mail.

“Year-to-date net foreign buying transaction [amounted] to P793.67 million, meaning that foreign funds are quite bullish on SMFB going forward.”

Timson Securities, Inc. equity trader Jervin S. de Celis noted that as of Dec. 31, 2018, SMFB was trading at 27.89x its price-to-earnings ratio, making it a cheaper choice compared to Jollibee Foods Corp.’s 38.08x and Universal Robina Corp.’s 30.41x.

Mr. De Celis also pointed out that investors were already expecting the company to post good bottom line figures, but it reported a better-than-expected net profit of P18.2 billion versus 2017’s P17.3 billion.

Cristopher Adrian T. San Pedro, technical analyst at Unicapital Securities, Inc., noted the stock’s price reached as high as P115 per share on April 15 when the company’s annual report was disclosed, marking a 52-week high.

SMFB’s net income attributable to equity holders of the parent company rose to P18.25 billion last year, up 5.43%. The company’s consolidated net income after taxes also increased by 8.17% to P30.53 billion in 2018 from the previous year’s P28.23 billion, driven by higher sales volume and gross profit across all segments.

The company has three primary operating segments, namely: beer and non-alcoholic beverages, spirits and food. Net profit of the beer and non-alcoholic beverages segment increased by 15.08% to P23.84 billion, while the spirits segment’s earnings rose 74.92% to P1.05 billion. Meanwhile, the net income of the food segment slid 18.38% to P5.64 million.

For this year, Mr. San Pedro expects SMFB’s net income to reach P36 billion, citing the lower inflation expectations, the increased consumer spending amid the election season, and a possible rate cut by the central bank as drivers for consumer-focused companies.

Timson Securities’ Mr. De Celis said he expects the company to post a P21-billion net income amid a “calmer inflation environment” as well as lower import costs from a stable peso.

Philstocks’ Mr. Tan expects SMFB’s bottom line to reach P22 billion this year, citing renewed strength in household consumption and the company’s expansion plan that would reduce logistics costs.

Mr. Tan placed primary and secondary support at P108 and P100, respectively, and primary and secondary resistance levels at P115 and P116.10.

“The stock remains bullish and I expect the company to consolidate between P104.50 support and P115.00 resistance, with the possibility of testing P120.00 and P130.00 if it stays above P106.00 in the short term,” Mr. San Pedro said.

For Timson Securities’ Mr. De Celis: “I think [SMFB] has to retrace and form a strong support level at least above P100 because [SMFB] was last seen at P112 in 2011, so I think we can consider this current market price as a short-term resistance level.” — Christine Joyce S. Castañeda

DA to expand sorghum planting to boost feeds

April 22, 2019 | 12:05 am

THE Department of Agriculture (DA) hopes to expand land planted to sorghum to 200,000 hectares by early 2020, as it views the grain to be highly suited to Philippine conditions.

Sorghum is one of the five most important cereal crops in the world together with rice, wheat, maize, and barley. It also performs well in hot and dry regions due to its ability to withstand drought and heat.

The United States is the largest producer of sorghum, with output of 480 million bushels in 2016.

“The Department of Agriculture is embarking on a program to increase the production of feed grains by targeting 200,000 hectares to be planted to sorghum by the First Quarter of 2020,” Agriculture Secretary Emmanuel F. Piñol said in a social media post.

The production of sorghum is expected to supplement the corn crop, for which prices have been rising, in order to contain costs for the feed industry.

Target areas for the sorghum program are areas currently planted to coconut, where it can be introduced as a secondary crop, as well in ancestral domain areas, and land currently plated to upland rice.

The United States for hybrid seed and India for open pollinated variety (OPV) are being considered as suppliers, the DA said.

“Sorghum which was introduced to the Philippines about 40 years ago, but never really gained popularity as a source of protein for animals because of the absence of support from government. Studies show, however, that sorghum has a higher protein content than corn and is tolerant to long dry spells needing only 35% of the water needed by corn,” he noted.

“The sorghum program will be supported by a loan program of the DA’s Agricultural Credit Policy Council (ACPC), the Agriculture and Fisheries Machinery and Equipment (AFME) Loaning Program which extends loans at 2% to poultry and livestock growers to establish their own village-level feed mills,” he said.

The supply of pork is expected to be tight next year following the spread of African Swine Fever (ASF), which has greatly affected the hog industries of China, Vietnam, Cambodia, and parts of Europe. — Vincent Mariel P. Galang

Who’s a Man Now?

April 22, 2019 | 12:04 am

THERE ARE many answers to the question of what makes a man. As times change, so do those answers, and a culture of diversity, plurality, and the age of postmodernism has ushered in a new man. Three scorchingly attractive male celebrities — namely: Enchong Dee, Tanner Mata, and Daniel Matsunaga — fill in the blanks of what it takes to be a man for Avon’s new campaign, called “Gentleman Up,” calling for men to embrace different definitions of manhood.

A fashion show on April 11 served to celebrate men of all ages and colors (not necessarily shape; hardly an inch of body fat was seen on the runway), but, hey, at least we’re getting somewhere. Men of different professions also walked the runway: there was theater actor Ian Ignacio, chef Gerick Manalo, photographer Ari Simangan, singer Joshua Bulot, blogger Chuck Aquino, and nurse Clint Karklins. All those men were mostly attractive anyway, and could surely moonlight as models, if they aren’t already.

Little of the show focused on actual clothes, but on men’s underwear. The show was not short of spectacle.

One highlight was seeing an androgynous, muscular model walk the runway in thigh-high, high-heeled sequin boots. He sashayed and won the audience over, and to the cheers of most of the audience, kissed his fiance, who was sitting in the front row, full on the lips,. After which, our model did a twirl — and tripped on his heels — but used the opportunity to slink away seductively, moving and purring like a cat on the prowl. Bravo.

After that, the celebrity endorsers, Messrs. Dee, Mata, and Matsunaga walked down the runway with a solo walk each, and then as a group, escorted by male models all throughout.

GETTING THE MEN INVOLVED
Tisha Rodriguez, Head of Marketing for Avon Philippines, said, “We wanted to get more male endorsers who come from different backgrounds… for us to show that Avon is diverse.”

While Avon is mostly known for its feminine underthings and female-targeted cosmetics, Ms. Rodriguez announces that for many years, Avon has had products that cater to men. “Now is just the right time to communicate it more strongly,” said Ms. Rodriguez.

Meanwhile, Ms. Rodriguez says that while Avon’s direct-selling approach is still strongly in place, they have taken steps to strengthening their e-commerce platform. “This is complementing the way that they do business,” she said, speaking about Avon’s direct sellers. While most people know about the Avon Lady, Ms. Rodriguez points out, “We’re offering opportunities for both men and women.”

WHAT IT TAKES TO BE A MAN (AND AN UNDERWEAR MODEL)
After the show, BusinessWorld caught up with Mr. Dee and Mr. Mata.

Mr. Dee, who is an actor and athlete, said that it was his first time to model briefs — while he has appeared in some of the Bench underwear shows, he usually wore jeans in those. As a swimmer, he said that he didn’t feel odd at all, as he had been competing in swim trunks which are not all that different.

Male models put on, or take off clothes in front of an audience for a living. While most of us would probably faint at the thought of being applauded by audiences while wearing our everyday clothes, imagine the pressure it must take to be seen by dozens, hundreds, even thousands (if you’re on a billboard) without those clothes on. Is it all based on an obligation to do a job right, or is there pleasure in being seen in your skin?

“An obligation? Maybe, just a little bit,” said Mr. Dee. “It’s more of my personal health. I do all these things for my health. The by-product of that is having a good body.” He says he doesn’t go to the gym just to get abs: “I want to go to the gym because I want to live a healthier life.”

As for Avon’s campaign, he says that, “A modern gentleman definitely has kindness.”

As for model Mr. Mata, who was wearing just jeans and a leather harness as we interviewed him, he said, “I actually don’t enjoy taking my clothes off. Usually, it has to be for a good reason. This is kind of promoting, you know, positivity and men’s mental health… it’s a good inspirational message.”

As for being a modern man, he says, “Being a man today is definitely being respectful to everybody, no matter what age, no matter what your beliefs are. Just try to be true to who you are and love people for who they are.” — Joseph L. Garcia

PayMaya reports higher volume of cashless transactions in Q1

April 22, 2019 | 12:04 am

PAYMAYA Philippines, Inc. said it increased the volume and amount of cashless transactions it processed in the first quarter of the year, driven by demand from traveling customers.

The mobile wallet arm of PLDT, Inc. said in a statement last week that travel-related expenses are among the most common use cases for cashless transactions, based on its data during the three-month period.

“PayMaya Business recorded a significant increase in the first quarter in terms of the number and amount of credit, debit, and prepaid card transactions it processed as the acquirer of top online commerce sites that offer travel services. Flag-carrier Philippine Airlines and one of the biggest online travel booking platforms in Asia, Agoda, earned the top 2 spots,” it said.

PayMaya noted travelers are among its top customers during the three-month period. Travelers used PayMaya to pay for airline tickets and accommodations.

“Many Filipinos are now discovering the added value of using PayMaya for their travel needs, because aside from enabling them to book that ‘Piso Sale’ deal or get the best travel accommodations, they are also able to seamlessly use it here and abroad wherever Visa or Mastercard is accepted,” PayMaya Chief Operating Officer and Managing Director Paolo Azzola said in the statement.

He noted that allowing customers to use the digital wallet outside the country without having to make advanced calls to activate the virtual or physical card is a demand driver for PayMaya, as it “provides not just convenience, but peace of mind.”

“[W]e are confident that we see continuous growth in travel-related transactions as we aggressively widen opportunities for consumers by giving them the means to make purchases with PayMaya…,” Mr. Azzola added.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

PHL poised to export onions to Indonesia

April 22, 2019 | 12:04 am

THE Department of Agriculture (DA) said that the Philippines is set to export onions to Indonesia.

“The representative of the Indonesian market met with our onion producers and they are now looking at all of the requirements. I’m happy that the onion farmers from Mindoro, Cagayan Valley, Tarlac, Nueva Ecija and Iloilo came,” Agriculture Secretary Emmanuel F. Piñol told reporters recently.

“Depends on the engagements right now but the importers of Indonesia are willing [and] ready. They are asking for white and red onion, and shallots,” he said.

Mr. Piñol said that there is still no definite volume requirement from Indonesia. “Wala pang [There is still no] volume requirement from Indonesia, but our market coordinator in Jakarta N Mark Castro is arranging the presentation of samples,” he said in a text message sent to BusinessWorld.

N Mark Castro is a Jakarta-based Filipino investment and management consultant, who conducted the ground work in Indonesia and is connected with the possible importers.

According to data the Philippine Statistics Authority, onion production of during the fourth quarter of 2018 rose 1% to 9.32 thousand metric tons (MT). Ilocos Region accounted for the majority of production at 99.8%.

The department is also looking at building more cold storage facilities for onions amid forecasts that the domestic crop can meet 80% to 90% of demand by next year, by lending to cooperatives.

“We’re hoping to build about 8 to 10 units of cold storage facilities for next year solely for onions,” Mr. Piñol said. — Vincent Mariel P. Galang

Gov’t debt rates seen mixed

April 22, 2019 | 12:03 am

GOVERNMENT SECURITIES (GS) on offer this week will likely end mixed propelled by higher US Treasury yields and amid anticipation of policy action from the local central bank.

The Bureau of the Treasury (BTr) is offering P15 billion worth of Treasury bills (T-bill) today, broken down into P4 billion and P5 billion via three- and six-month papers, respectively, and P6 billion from the one-year debt papers.

The BTr will also offer on Tuesday reissued 20-year Treasury bonds (T-bond) worth P20 billion with a remaining life of 19 years and nine months.

Traders interviewed said rates of the T-bills to be auctioned off Monday will move sideways or a tad higher from the previous auction.

“For the T-bills, yields may be higher by five to 10 basis points (bp) from the previous auction. But since the one-year [paper] was rejected last time, it may climb 5-10 bps higher from the secondary market,” a bond trader said in a phone interview Wednesday.

Last week, the government made a partial award of the T-bills it placed on the auction block, borrowing just P7.264 billion out of the programmed P15 billion as it rejected all bids for the one-year papers.

Yields on the three- and six-month papers climbed a tad to 5.614% and 5.987%, respectively.

At the secondary market on Friday, the three-month, six-month and one-year securities were quoted at 5.691%, 5.962% and 6.102%, respectively, according to the Philippine Dealing System website.

“T-bill rates for auction will likely move sideways or 5 bps higher from the previous auction as elevated US Treasury yields for most of last week dampened sentiment in the GS market,” Robinsons Bank Corp. peso sovereign debt trader Kevin S. Palma said in a message on Wednesday.

He added that “upbeat” economic data from China have caused US Treasury yields to pick up.

On Wednesday, China said gross domestic product (GDP) grew 6.4% in the first quarter, slower than the 6.8% recorded in the same period in 2018.

Apart from Chinese GDP growth, industrial production, retail sales as well as fixed asset investments posted higher expansion, beating market expectations.

Mr. Palma added that reinvestment requirements may propel demand for this week’s auction as there are debt papers maturing on April 24 and 26 worth some P34.5 billion.

For the T-bonds, the first trader said the 20-year IOUs may fetch a rate from 6.05-6.25%, much lower compared to the yields quoted when the debt papers were last offered earlier this year.

The BTr raised P20 billion through fresh 20-year T-bonds it offered on Jan. 22, receiving overwhelming bids worth P50.921 billion. It fetched a coupon rate of 6.75%, with an average rate of 6.716%.

“Since the initial issuance was still at the beginning of the year and the market already rallied, we expect a significantly lower rate for the 20-year papers, but still in line with the secondary market,” the first trader said.”

Based on the PHP Bloomberg Valuation Service Reference Rates, the 20-year debt was quoted at 6.051%.

Mr. Palma added that the rate of the 20-year bonds will be much lower versus the last time it was offered as “we near BSP’s (Bangko Sentral ng Pilipinas) policy easing” through a cut in policy rate or reserve requirement ratio (RRR).

BSP Governor Benjamin E. Diokno earlier said a cut in benchmark interest rates, currently at the 4.25-5.25% range, will be considered at the May 9 policy review of the Monetary Board.

He also floated the possibility of a reduction in big banks’ RRR, which is currently at 18%.

“[S]ince the market still waits for the timing, bids may come in slightly higher than where it last traded in the secondary market,” Mr. Palma added.

The government plans to borrow P315 billion from the domestic market this quarter, broken down into P195 billion in T-bills and P120 billion in T-bonds.

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

Happy Skin goes active with new collaboration

April 22, 2019 | 12:03 am

LOCAL beauty brand Happy Skin now offers “an active line” of makeup in collaboration with actress Kathryn Bernardo that is made for people who want their makeup to last the entire day even through the sweatiest conditions.

Called the Generation Happy Skin ACTIVE, the six-piece collection is the brand’s second collaboration with Ms. Bernardo after last year’s Generation Happy Skin launch.

“I’m actually happy because this is our second collaboration with Kathryn because the first one did so, so well and this time this collection is geared towards [those] with active lifestyles,” Rissa Mananquil-Trillo, co-founder and chief brand officer of Happy Skin, told BusinessWorld during the launch on April 6 at the Atrium of SM North EDSA The Block in Quezon City.

Generation Happy Skin is the brand’s diffusion line which is meant to “allow [customers] to get the Happy Skin products at an accessible price point,” said Ms. Mananquil-Trillo.

“[Her collections] are always inspired by her own beauty routine and so last year was about achieving a simple kind of beauty; this time it’s something that can withstand working out,” she explained.

The collection includes the Love Your Lips Intense Color Butter Balm SPF 15 (P349) which comes in four shades; My Lips But Better Ultra Matte Lippie (P399) which has two shades; Kiss and Bloom Water Lip and Cheek Tint (P299) which has two shades; Easy Eyes Crease-Proof Eyeshadow Stick (P399) which comes in two shades; On-the-Go Blush Lightweight Cheek Stick (P399) with two shades; and Simply Defined Budge-Proof Gel Eyeliner (P399) with one “universal” shade of dark brown.

“This is a generation that’s used to getting everything with a swipe and a click and we want to be able to provide that through Generation Happy Skin,” Ms. Mananquil-Trillo. — ZBC

Happy Skin Cheek Stick

TRYING IT OUT

In a Happy Skin press release about its new Generation Happy Skin ACTIVE line, done in collaboration with Kathryn Bernardo, the actress was quoted as saying that a particular favorite of hers is the Cheek Stick which she claimed is always in her makeup kit — and this writer agrees as after the press launch, media members were given all six products to try out.

The Cheek Stick I got was Glowing, a red-brown shade that gives the face warmth which is important for a person with fair skin like mine. It’s a cream cheek product which glides on smoothly and is pigmented enough that one can build up the color if they want to but not so much that you have to be careful about putting on too much.

Another product from the line that I particularly like is the Water Lip and Cheek Tint which I got in the shade Breathe, a light red-orange shade that went well with my skin tone both on my lips and cheeks. I haven’t had much success in getting tints to work for me because my skin is so dry that I have to work really fast to blend the colors on (if not I will have a weird looking spot on my cheek all day). My lips don’t do too well with tints normally as they are so dry that tints stick to dry patches and get rubbed off easily.

I am happy to note that this formula works well for me, the tint does not get instantly absorbed on my cheeks so I can blend it out with an easy heart, and on my lips it applies evenly though it takes a bit longer to dry because of the watery texture.

Now, for the products I have less affection for. There is the Gel Eyeliner which uses a twist mechanism to dispense the product. The moment I tried to apply it on my eyes, the tip broke and it had a stiff texture that pulled on my skin. I prefer creamier formulas for my eye products.

Then there is the Butter Balm. First, there’s no shade that went well with my skin as most were nudes and browns which wash out my skin. It is highly pigmented but it does get rubbed off after an hour or so. I prefer my ever-reliable Burt’s Bees Tinted Lip Balm (P690).

In all, for people who want long-lasting makeup, this is a good line to try out though people with drier skin might have trouble working with the drier formulas. — Zsarlene B. Chua

Nestlé Philippines targets to use 100% recyclable packaging by 2025

April 22, 2019 | 12:03 am

WHILE it is working towards making the packaging of its products 100% recyclable in six years, Nestlé Philippines needs support from the government and other stakeholders on recycling efforts.

Kais Marzouki, the chairman and chief executive officer of Nestlé Philippines, said in a recent media briefing that the company has made 75% of their packaging recyclable.

“Plastic is a big topic in the Philippines. We are committed towards the goal that our company has set out, which is to make sure all our packaging is recyclable by 2025,” he said.

“But truth is already today, 75% of our packaging is recyclable. It doesn’t mean that it’s being recycled. So we need, and we are working with other companies and with government, to try to create a circular economy,” he added.

Nestlé Philippines handles several food brands in the country that are sold by retail: Nescafe, Coffee-mate, Milo, Nido, Bear Brand, Nestea, and Chuckie, among others.

Earlier this month, World Bank Acting Director for the Philippines Agata E. Pawlowska said in a Marine Plastics Conference that the country now has the highest rate of mismanaged plastics in the world.

“There is a lack of statistics on the amount of plastic in the Philippine waters. What is known is that the amount of mismanaged plastic waste is continuously increasing, and that the plastic crisis requires urgent action,” she said.

In December, House Bill No. 8692 was filed seeking a nationwide ban on single-use plastic products such as grocery bags, food packaging, water bottles, straws, cups and sachets. It is still on first reading at the House of Representatives.

Nestlé Philippines’ ready-to-drink business unit manager Veronica Caron V. Cruz said the carton boxes used for the Chuckie packaging is being regularly collected to be recycled as paper.

“Actually the Chuckie packaging is recyclable. So what we do is right now we collect in specific areas the used beverage cartons… And we have a mill in Bulacan. We work with Tetra Pak, we have a paper mill and we grind it, and we get the paper. In fact now, in Chuckie promo packs, if you see the sleeves that we have, it’s recycled paper already,” she said.

She added that this year is the first time Nestlé Philippines is using recycled paper for its promotion packs. The company intends to continue finding ways to recycle the waste from product packaging.

“The goal is to get more people to bring in the used box cartons, used beverage cartons into the mill so we get to recycle more. And what we do is really use it back, then it becomes a complete cycle,” Ms. Cruz added. — Denise A. Valdez

Volvo gets set for an electric future with new hybrid powertrains

April 22, 2019 | 12:03 am

By Manny N. de los Reyes

VOLVO HAS taken a major step towards its electric future with the release of new or upgraded electrified powertrain options, which will be made available across its entire global range of sedans and SUVs.

The company has upgraded its existing T8 and T6 Twin Engine plug-in hybrid powertrains, while confirming that plug-in options will now be available on every model it produces. Plug-in technology allows hybrids to travel longer distances on pure electric mode compared to traditional hybrids that use its internal combustion engine for battery charging.

Meanwhile, a T8 Twin Engine S90 Plug-in Hybrid has just been made available in the Philippines. “This is our first step towards locally implementing Volvo’s global vision to have half of our global sales comprised of fully electric cars. Safer for the environment, better for everyone on the planet,” shared Volvo Philippines Marketing Head Christopher L. Yu.

Volvo will introduce a range of hybrids in the coming months, starting with diesel and petrol versions on the S90 flagship sedan and the XC90 and XC60 SUVs.

These hybrids will, for the first time, offer customers Volvo’s advanced kinetic energy recovery braking system. This system is coupled with its existing internal combustion engines to create a new integrated electrified powertrain, under its new ‘B’ badge.

This new powertrain, electrified via brake-by-wire energy recovery, offers drivers up to 15% fuel savings and emission reductions in real world driving.

The new brake-by-wire system interacts with the energy recovery system and reduces fuel consumption and emissions by recovering kinetic energy under braking.

Volvo has upgraded its production capacity so that up to 25% of total production can be Twin Engine plug-in hybrid cars. It also expects its new ‘B’ badged powertrains to gradually become the new standard, moving it closer to its goal that by the middle of the next decade, all of its cars will be electrified.

There will be new and upgraded powertrains introduced on Volvo’s larger Scalable Product Architecture (SPA)-based cars.

The upgraded T8 Twin Engine plug-in hybrid with up to 420 horsepower features a new battery and brake-by-wire advanced battery charging. The range of the T8 powertrain has increased by around 15% and this powertrain is available on all 90 and 60 Series cars.

An upgraded version of the smaller capacity T6 Twin Engine plug-in hybrid is also combined with the new battery and brake-by- wire technology. This powertrain also offers an approximate 15% range increase and is available on the V60 estate and S60 sedan.

The XC90 will be available with a B5-badged hybrid petrol or diesel variant, as well as a B6-badged petrol hybrid.

On the XC60, customers will be able to choose between a B5 hybrid petrol or diesel variant, a B4 diesel hybrid as well as a B6 petrol hybrid. The B5 petrol will be available with front-wheel drive or all-wheel drive.

The company’s smaller Compact Modular Architecture-based XC40 SUV will also receive a new electrified option, in the form of a T5 Twin Engine petrol-plug-in hybrid. A second T4 Twin Engine plug-in hybrid option will follow later.

USDA sees strong PHL soybean meal market due to growing demand for animal feed

April 22, 2019 | 12:03 am

THE Philippines was the top export destination for soybean cake and meal from the United States in the week to April 11, according to the United States Department of Agriculture (USDA), which sees a burgeoning market due to the growth in meat consumption and the consequent need for animal feed.

The USDA weekly export sales report noted that soybean cake and meal exports were up 57% from the previous week, and up 63% from the prior four weeks’ average.

“The destinations were primarily to the Philippines (75,600 MT), Mexico (54,400 MT), South Korea (52,500 MT), Colombia (47,700 MT), and the Dominican Republic (35,800 MT),” the agency said in the report.

Soybean meal (SBM) is primarily used to feed farm animals.

US Customs data show that SBM imports by the Philippines from th US totaled $888 million in 2018, making it the largest market for US SBM. The Global Trade Atlas estimates that the US accounts for 84% of the Philippines’ SBM imports.

The USDA said in its Global Agricultural Information Network (GAIN) report that demand for SBM in the Philippines is expected to increase to 3.15 million tons in milling year (MY) 2019-2020 “as local livestock and poultry raisers capitalize on the growing consumption of meat and meat products, driven by an expanding economy and rising incomes.”

According to data from the Philippine Statistics Authority (PSA), the economy expanded by 6.1% in the fourth quarter of 2018, bringing 2018 Gross Domestic Product (GDP) growth to 6.2%. At the beginning of 2019, the government said that it is keeping its 7-8% growth target for the year.

“Next to rice, which accounts for over a fourth of total agricultural output, hog and chicken production contributed the most to Philippine agricultural output in 2018 with shares of 15% and 9%, respectively. Both industries continue to consolidate and modernize,” the USDA said.

Specifically, it noted that livestock grew by 1.9%, year-on-year, with hog production growing by 2.4%, while poultry output grew by 5.8%, year-on-year, with chicken production expanding by 5.2%.

“Hog feeds account for an estimated 60% of overall feed production; poultry feeds are roughly 25%, and aquaculture and other animal feeds comprise 15%,” it said.

The USDA said that domestic SBM production is still insignificant and the industry is very much dependent on imports, and that it expects no change in SBM output from MY 2019-2020.

Citing the 2019 Alltech Global Feed Survey, the Philippines together with Indonesia, Vietnam, and Thailand, account for 93% of the feed production in Southeast Asia, but the region’s feed output accounts for only 20% of Asia-Pacific production. — Vincent Mariel P. Galang

Yields climb on easing bets ahead of break

April 22, 2019 | 12:02 am

YIELDS ON government securities (GS) rose slightly last week amid expectations of monetary policy easing and continued global market correction as well as the holiday-shortened trading week.

On average, debt yields — which move opposite to prices — inched up by 4.1 basis points (bp) week on week, the PHP Bloomberg Valuation Service Reference Rates as of April 17 published on the Philippine Dealing System’s website showed.

Michael L. Ricafort, economist at Rizal Commercial Banking Corp. (RCBC), said in an email that yields become “less inverted” after declines in short-term interest rates and the continuous “healthy” upward correction in long-term tenors following bigger declines last month.

“The one-month and three-month tenors were again slightly lower by -0.04 week-on-week after recent hints about possible monetary policy easing as early as the next monetary policy meeting on May 9, 2019 amid easing inflation trend,” said Mr. Ricafort.

The Bangko Sentral ng Pilipinas’ Monetary Board will hold its third policy review for this year on May 9 and might consider a cut in benchmark interest rates.

Mr. Ricafort added that “government bond yields in the US and in other developed countries mostly continued to correct higher recently…after global crude oil prices lingered at new 5-month highs on reduced output by OPEC (Organization of Petroleum Exporting Countries) and non-OPEC member countries as well as possible full enforcement on the US-led sanctions on Iranian oil exports by May 2019, and partly after recent comments from some Fed officials that fed fund rates may remain unchanged until the fall of 2020.”

For his part, Nicholas Antonio T. Mapa, senior economist at ING Bank N.V.’s Manila branch, said last week’s trading was “lackluster,” with most market participants likely out for the holidays.

“Most dealers were generally trimming positions with two days off,” Mr. Mapa said in an email.

At the secondary market on Wednesday, at the short end, the 182- and 364-day Treasury bills (T-bill) climbed by 0.8 bp and 1.5 bps to yield 5.962% and 6.102%, respectively, while the rate of the 91-day T-bill fell by 3.6 bps to 5.691%.

At the belly of the curve, rates increased across the board. The seven-year Treasury bond (T-bond) went up by 11.7 bps to yield 5.982%, followed by the five-year T-bond which saw its rate climb 8.3 bps to 5.909%. The two-, three- and four-year debt papers gained 4 bps (5.971%), 4.4 bps (5.915%) and 6.1 bps (5.897%), respectively.

“The 7-year to 9-year benchmark interest rates posted the biggest weekly increase of +0.12 — near one-month highs; but still among 10-month lows — partly due to higher global oil prices hovering among 5-month highs that led to higher local fuel pump prices, possible increase in electricity rates amid peak electricity demand…[and the] El Niño drought that could lead to some increase in agricultural prices,” noted RCBC’s Mr. Ricafort.

“Similarly, on external factors, the 10-year US government bond yield corrected higher recently to 2.60%, near one-month highs…, up from the low of 2.34% on March 28, 2019.”

At the long end, the 10- and 20-year T-bonds saw their rates go up by 11.0 bps (6.065%) and 2.6 bps (6.051%), respectively. The 25-year bond fell by 2.2 bps to yield 6.18% from a week ago.

Going forward, Mr. Ricafort expects short-term yields to continue their recent declining trend amid possible monetary easing by way of a cut in policy rates.

ING’s Mr. Mapa said investors are also staying “defensive” ahead of the 20-year T-bond auction this week. — Lourdes O. Pilar

Marvel and adidas collaborate on heroic footwear

April 22, 2019 | 12:02 am

IN TIME for the cinema release this week of the much-awaited movie Avengers: End Game, adidas Basketball and Marvel announced a collaboration for a new footwear collection.

The adidas/Marvel “Heroes Among US” collection boasts of five new shoe designs which the two groups tout as pairing the unique ability of National Basketball Association (NBA) and Women’s NBA athletes James Harden, Damian Lillard, Candace Parker, John Wall, and Tracy McGrady with the unmistakable flair of iconic Marvel characters Iron Man, Black Panther, Captain Marvel, Captain America and Nick Fury.

In the Philippines, however, only Dame 5 and N3XT L3V3L will be available beginning April 24 at select adidas Philippines store.

The Dame 5 is available for P6,500 while the N3XT L3V3L is priced at P9,000.

For more information, visit https://www.adidas.com/us/heroes_among_us — Michael Angelo S. Murillo

1...9,6559,6569,657...12,801 Page 9,656 of 12,801