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Universities, CHED to assist BARMM in education, other sectors

THE MINISTRY of Education of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) has partnered with the Commission on Higher Education (CHED), along with leading Philippine universities, for monitoring, capacity-building and assistance to former combatants in the region. BARMM Minister of Education Mohagher Iqbal and CHED Chairman J. Prospero E. De Vera III finalized the deal at a meeting in Davao City earlier this week. “We are assisting the BARMM consistent with the policy of President (Rodrigo R.) Duterte that all young Filipinos must have access to quality education and that no qualified student is denied access to education on account of poverty,” Mr. De Vera said in a statement. He also acknowledged the Presidential Peace Adviser Carlito G. Galvez, Jr. for pushing for the partnership. Under the agreement, CHED and the universities will provide technical assistance on the following: Ensuring the inclusion of private Higher Education Institutions (HEIs) in the BARMM into the government’s student financial assistance program; capacitate and monitor BARMM HEIs on education standards; and develop a database of poor students and children on former Moro Islamic Liberation Front (MILF) combatants so they can avail of accreditation and scholarship programs.

OTHER SECTORS
Aside from education, CHED will also mobilize the following universities for assisting the BARMM government in other sectors: Mindanao State University-Iligan Institute of Technology for engineering and technology; Mindanao State University-Naawan for fisheries; University of the Philippines-Los Baños (UPLB) College of Public Affairs and Development for governance, project development and monitoring; UPLB College of Agriculture, Central Mindanao University, and University of Southeastern Philippines for agriculture; University of the Philippines-Manila College of Public Health for community health care delivery systems; University of the Philippines Diliman School of Urban and Regional Planning and UP Resilience Institute for technical assistance to local governments in planning and development; Ateneo de Davao for continuing adult education. A technical working group has been formed to map out the details of the partnership.

Nation at a Glance — (04/12/19)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Nation at a Glance — (04/12/19)

Imagining a future of difficulties and opportunity

Imagining the future of work is no easy task. Times are rapidly changing, and technology has quickened that pace even further. A new generation has taken over, injecting a diversity of values and perspectives over the workplace of today, as well as offering up new solutions to age-old problems. Meanwhile, new standards are constantly being expected of today’s companies, triggered by looming global issues such as climate change and the advent of the fourth Industrial Revolution.

But this was the goal of the fourth leg of SparkUp’s Spark Series for this year, this time held at the Dizon Auditorium of the University of Asia and the Pacific last March 27. Gathering industry experts to talk about relevant topics in building tomorrow’s workplace, from the coming of Generation Z, technological innovation, to climate change.

Bianca EleisseEyales, associate consultant at Acumen Strategy Consultants, kicked off the discussions, presenting insightful research on the newest generation of workers — the Gen Z, or those born between 1996 to 2014. According to Acumen’s ‘Decoding Digital Generations Study’, Gen Z is characterized by a mindset that is mature, empowered, and one that seeks authenticity.

Having grown up in times of great socio-political turmoil and impending natural calamity, Gen Z-ers are hyper-aware of society’s issues and are more motivated than their predecessors towards finding meaningful solutions to such issues. Moreover, many people from this generation seek stability, financial security, and purpose in the careers they choose to pursue. Being champions of change, Gen Z seeks to bring an emphasis toward accountability, responsibility, ethical reputation, and positivity into the workplace.

“We find that Gen Z have experienced a lot of socio-political issues and natural disasters, but also the optimization and the rising dominance of social media. Because of this, technology plays an inherent part of their concept of being,” Ms. Eyales said.

The world of the new generation, she added, is one of hyperspeed and connectivity, brought about by technological innovation, and so Gen Z has little tolerance for inefficiency or outdated practices when it comes to the workplace.

The discussion on technology and disruptions in the workplace continues in the second session. Bryan Makasiar, senior product manager for FinTech at UnionBank, spoke on the current and historical landscape of financial technology in the Philippines, and how might technology affect the future of established industries like banking.

FinTech, as it is now commonly known, are technologies used and applied in the financial services sector, chiefly used by financial institutions themselves on the back end of their businesses. But the rise of companies like PayMaya, DragonPay, and even technologies like cryptocurrencies are raising questions about the declining role of banks in the digital age.

But such technologies do not necessarily pose any threats to banks. Mr. Makasiar proposed that, instead of competing with FinTechs, banks in the digital age should seek to adopt them and collaborate with them to offer better financial solutions and services to their clients.

The rise of disruptors like Uber, AirBnB, and Netflix, he pointed out, was not because of the technology they offered, but of the convenience and overall better service these disruptors introduced to their respective industries.

“Technology by itself is not a disruptor. It’s not being customer-centric that’s the biggest threat to any business,” he said.

Speaking on the topic of future threats, Miguel de Vera, head of strategic initiatives at Energy Development Corp. (EDC), in his session, shed some light on what may be the biggest threat to business facing the present: climate change.

Mr. de Vera talked about the destructive capacity of climate change on a country like the Philippines and the urgent need for clean, renewable energy to replace the country’s use of fossil fuels, which contribute huge amounts of the greenhouse gases responsible for climate change.

“We’re here today to talk about your future and the future workforce. If you ask me, there’s no use talking about the future workforce when our worsening climate, may be due to our poor choices when it comes to electric power, doesn’t guarantee that we will have a liveable world tomorrow,” he said.

With the new opportunities emerging in the workplace of today, Mr. de Vera urged future workers to pursue ethical and meaningful careers that involve improving the country’s economic, environmental, and societal impact.

Cooperation and collaboration will be key in facing tomorrow. But with the rapidly changing times, it is easier said than done. Ken Lerona, head of marketing and corporate communications at Entrego, concluded the forum by speaking on one of the most pressing concerns facing new and old workers alike. How do you bridge a gap of multiple generations?

Mr. Lerona spoke on the varying differences between Gen Z-ers and those that came before them, the millennials and the baby boomers. But more importantly, he touched on their similarities, and how these different generations can find common ground despite varying age gaps. Intergenerational reciprocity, or mutual compassion and respect towards one generation with another, is the answer.

“It’s a two-way street. To bridge the generation gap, we have to learn how to understand each other and to respect each other. We have to remember this: no generation is better than the other,” Mr. Lerona said.

The Spark Series 2019 at the University of Asia and the Pacific was presented by BusinessWorld and Energy Development Corporation, together with Acumen Strategy Consultants and J. Legaspi Computer Graphics (JLCG), in partnership with University of Asia and the Pacific, with media partners Philippine Star and ONE News, and organization partner Enterprise Management Association.

Trade gap grows in February as exports drop

The country’s trade-in-goods deficit widened in February as exports contracted while imports grew at a slower pace, the government reported this morning.

Preliminary data from the Philippine Statistics Authority showed the February trade deficit at $2.788 billion, smaller than January’s deficit of $3.920 billion but bigger than February 2018’s $2.537 billion.

Import payments rose 2.6% year on year to $7.966 billion in February, easing from upticks of 3.6% in January and 13.7% in February 2018.

On the other hand, export sales went down by 0.9% to $5.177 billion in February, versus the 6.7% drop in January and the 1.3% growth recorded in February 2018.

The February reading marked the third straight month of export decline following the contractions of 6.7% in January and 12.2% in December 2018.

To date, merchandise exports contracted by 3.9% to $10.456 billion against the six percent target for this year of the interagency Development Budget Coordination Committee (DBCC), which sets official macroeconomic assumptions and fiscal program.

On the other hand, import of goods grew 3.1% to $17.165 billion on a cumulative basis against the DBCC’s nine percent projection for the year.

Consequently, this brought the year-to-date trade deficit to $6.708 billion, higher than the $5.763-billion shortfall in 2018’s comparable two months.

Electronic products, which make up more than half of the country’s exports, grew by 0.8% to $2.817 billion in February, with semiconductors contributing $2.004 billion, down 2.1% from $2.048 billion a year ago.

The US was the top export market in February with a 17.4% share at $901.86 million, followed by Japan’s 16.1% share at $832.98 million and China’s 12.8% share at $664.81 million.

China was the top source of imports that month with a 20.3% share worth $1.62 billion, followed by Japan’s 10.8% share at $859.65 million and South Korea’s 8.2% share at $657.05 million. — Mark T. Amoguis

Snapshots of Philippine poverty statistics: first semester, 2015 vs 2018

FEWER FILIPINOS were mired in poverty in the first half of 2018, the Philippine Statistics Authority (PSA) reported on Wednesday. Read the full story.

Snapshots of Philippine poverty statistics: first semester, 2015 vs 2018

Gov’t finds fewer Filipinos poor

By Marissa Mae M. Ramos
Researcher

FEWER FILIPINOS were mired in poverty in the first half of 2018, the Philippine Statistics Authority (PSA) reported on Wednesday.

Results of the First Semester 2018 Official Poverty Statistics by the PSA placed poverty incidence among individuals — the proportion of Filipinos whose incomes fell below the per capita poverty threshold — at 21%, compared to 27.6% recorded in the first half of 2015.

The report marked the first set of official poverty statistics from the Family Income and Expenditure Survey (FIES) 2018 which, according to the PSA, started to use a sample size of around 180,000 households “deemed sufficient to provide estimates at the provincial level and highly urbanized cities cognizant of the need for more disaggregated data.”

The latest poverty data translates to a reduction of more than five million poor individuals to 23.1 million in 2018 compared to 28.8 million in 2015, the PSA said in a press conference.

Snapshots of Philippine poverty statistics: first semester, 2015 vs 2018

“Over the course of three years, we can see that poverty [among population] decreased substantially — down by 6.6 percentage points — thanks to sustained economic growth and critical and broad-based reforms and investments that have translated to employment generation and social protection,” read the statement of the National Economic and Development Authority (NEDA), as delivered by officer-in-charge Adoracion M. Navarro.

NEDA attributed the improvement to the government’s implementation of its social programs such as the conditional cash transfer program that now includes an additional P600 rice subsidy cash grant; the P1,000 pension increase from the Social Security System since March 2017; and the rollout of the unconditional cash transfer of P2,400 per household released in early 2018 to cushion vulnerable groups from the transitory effects of the tax reform law.

As a result, NEDA said, the subsidence incidence among Filipinos — or the proportion of those whose incomes fell below the monthly food threshold — also went down to 8.5% in the first semester of 2018 from 13% in 2015’s first half.

Likewise, poverty incidence among Filipino families — or the proportion of those whose incomes fell below the poverty threshold — went down to 16.1% from 22.2%.

The subsistence incidence among families — or the proportion of those in extreme poverty — improved to 6.2% from 9.9%.

Food threshold is the minimum income required to meet basic food needs and satisfy the nutritional requirements set by the Food and Nutrition Research Institute to ensure that one remains “economically and socially productive.”

Similarly, the poverty threshold is the minimum income needed to meet basic food and non-food needs such as clothing, housing, transportation, health, and education expenses.

The per capita poverty threshold in the first half of 2018 was P12,577 per month as compared to P11,344 per month in the first half of 2015. Meanwhile, the monthly poverty threshold for a family of five members was P10,481 versus the P9,453 in 2015’s first half.

The per capita food threshold was P8,804 per month in first half 2018 as compared to P7,920 in first half 2015. For a family of five, the monthly food threshold in the first half of 2018 was P7,337 versus P6,600 in 2015’s first half.

The results also noted that incomes of poor families, on the average, fell 26.9% short of the poverty threshold in last year’s first half. This means that, on the average, an additional monthly income of P2,819 was needed by a poor family with five members to move out of poverty.

Gross domestic product (GDP), a measure of economic output within the country’s borders, grew by 6.3%, while inflation averaged 4.3% in 2018’s first half.

“While inflation rose to 8.1% in the period of 2015-2018 from 7.8% in 2012-2015, the growth of average income accelerated considerably to 21.2% from 15.3%, respectively,” NEDA said.

NEDA also cited the increase in the growth in per capita income of the bottom 30% of households to 29.2% in 2015-2018 from 20.6% in 2012-2015.

“These indicate that the pace (average of 6.5% GDP growth in 2012-2018), the quality and consistency of economic growth over the past seven years continue to benefit the poor,” according to the socioeconomic planning agency.

“In particular, the growing contribution of industry, particularly construction and manufacturing, to output and employment, are creating more income-earning opportunities that are accessible to the poor.”

Economists shared NEDA’s assessment.

“[The reduction was] basically rooted in the continuing economic growth expansion that the country has been experiencing. More and more economic growth is investment-led in the last two years, where the productive capacity of the economy is rising,” said Union Bank of the Philippines, Inc. (UnionBank) chief economist Ruben Carlo O. Asuncion in an e-mail.

Michael L. Ricafort, economist at Rizal Commercial Banking Corp. (RCBC) said in a separate e-mail that the stable GDP growth in the past years was “consistent with the significant reduction/improvement in poverty incidence.”

TARGET REACHABLE?
“While these initial results are encouraging, we have yet to wait for full-year results of the FIES, as targets in the Philippine Development Plan (PDP) 2017-2022 are based on full-year estimates,” NEDA said.

The current administration targeted to reduce poverty incidence to 17.3-19.3% in 2018 from 21.6% in 2015. The rate is targeted to go down further to 14% when President Rodrigo R. Duterte ends his six-year term in 2022.

For UnionBank’s Mr. Asuncion, the overall increase in prices of basic goods may be a possible drag in hitting this target.

“The country is poised to meet its [2022] target barring any hiccups in the economy. A downside hiccup lately has been the very high level of prices in the economy threatening the very heart of growth which is domestic consumption,” Mr. Asuncion said, referring to inflation’s acceleration to a nine-year-high 6.7% in September and October last year before posting steady monthly declines since then to a 15-month-low 3.3% in March.

For RCBC’s Mr. Ricafort: “The country could possibly meet the target of reducing poverty incidence to 14% by 2022 with economic growth expected to sustain above six percent in the coming years… fundamentally resulting in greater employment and business opportunities.”

Power demand outstrips reserves in Luzon

FOR THE FIRST TIME this year, grid operator National Grid Corporation of the Philippines (NGCP) has issued a “red alert” notice on Wednesday after power demand in Luzon exceeded existing reserves, raising the possibility of power interruption if the situation were to persist.

NGCP said it might resort to “manual load dropping” or rotational brownouts between 1:00-2:00 p.m. in some areas, including within the franchise of Manila Electric Co. (Meralco), to maintain the integrity of the power system.

However, the Department of Energy (DoE) downplayed the impact of the thinning power reserves as it pointed to the interruptible load program (ILP) of Meralco, which activates the scheme that prompts establishments with power generation sets to switch on their facilities to ease energy demand from the grid.

The agency said it did not expect any power interruption because there were 174.6 megawatts (MW) available under the ILP within the Meralco franchise area.

“The distribution utilities, specifically Meralco, have already notified the ILP participants to activate their self-generating facilities during the mentioned intervals which resulted to the de-loading of 174.3 MW,” the department said in a statement.

“This, along with the energy efficiency and conservation program exercised by the customers, may prevent the potential power interruption within its franchise area,” it added.

Along with energy players, the DoE said it was closely monitoring the increases in demand and the power plants that are expected to be operating.

“The other strategies considered by the power industry players include the management of plant maintenance schedules, the optimization of existing hydroelectric power plants, the upgrading of the electricity facilities, the preparation of available generator sets for unforeseen outages, the increased participation of big establishments in the [ILP], as well as the continued call for an energy efficiency lifestyle for electricity end-users,” it said.

NGCP at 8:33 a.m. on Wednesday announced that the Luzon grid would be on yellow alert and red alert at certain hours of the day, with power demand reaching 10,313 MW as against available capacity of 10,625 MW.

1,352 MEGAWATTS LOST
The issued red alert was from 10:01-11:00 a.m. and from 1:01-4:00 p.m. The yellow alert notice was from 9:01-10:00 a.m.; 11:01 a.m.-1:00 p.m.; 4:01-5:00 p.m.; and 6:01-9:00 p.m.

The warnings were caused by the high projected system demand and the outage and de-ration of several power plants that resulted in the thinning of reserves.

The DoE identified the plants on unscheduled outage as unit 1 of the Sual, Pangasinan power plant at 647 MW; unit 2 of South Luzon Power Generation Corp.’s plant at 150 MW; unit 3 of the Pagbilao, Quezon plant at 420 MW; unit 1 of South Luzon Thermal Energy Corp.’s plant at 135 MW.

With the unplanned shutdown of these plants, Luzon lost a total of 1,352 MW. NGCP maintains power reserves equivalent to the biggest power plant units that are operating — the two units of the Sual plant, each with a capacity of 647 MW. When these reserves are gone because of a surge in power demand, the system operator issues a red alert.

For most of last week, the Luzon grid was on yellow alert, prompting Meralco to warn of a possible increase in electricity rates when consumers receive their monthly bill. The distribution utility buys replacement power at the electricity spot market when the power plants it has supply contracts with are out.

Privately owned NGCP said rotational brownouts might be felt in parts of Ilocos Sur, Cabanatuan City, Bataan, Cagayan and parts of Apayao, parts of Camarines Norte, and Metro Manila. — Victor V. Saulon

World oil prices watched even as inflation eases toward target

INFLATION is expected to settle well below four percent this year, two global banks said, with one economist noting that only a steep rise in oil prices will push price increases beyond target.

Nomura economist Euben Paracuelles said oil price movements will be the biggest driver of Philippine inflation this year, even as he clarified that the overall hike in prices of basic goods is still on track to keeping within the 2-4% target range of the Bangko Sentral ng Pilipinas (BSP) for 2019.

“Our scenario analysis suggests crude oil prices are a bigger risk to the inflation outlook than the El Niño phenomenon,” Mr. Paracuelles said in a report published yesterday.

“By our estimates, however, it would take a substantial rise in oil prices (i.e., to an average $90/barrel) for full-year 2019 headline inflation to breach the BSP’s 2-4% target, in part because of favorable base effects and as food prices likely provide some offset.”

Monetary authorities have kept interest rates at the 4.25-5.25% range during their March 21 meeting, saying that they still need to confirm if the inflation downtrend will be sustained for the rest of 2019.

Last month’s inflation rate eased further to 3.3%, which pulled the three-month average to 3.8%.

However, BSP Governor Benjamin E. Diokno said policy makers need to remain watchful amid risks drawn from higher oil prices as well as the looming dry spell that will hit parts of the country possibly until October.

However, the sustained inflation slowdown is seen setting the stage for a policy rate cut, as well as a fresh reduction in the reserve requirement ratio (RRR) for big banks.

Nomura said the “relatively moderate” upside risks to prices “may provide BSP with scope to cut its policy rate in Q2” which would be earlier than the bank’s original forecast of monetary easing in July-September.

“In addition, we think the case for a near-term cut in the RRR remains clear, given easing inflation and tighter liquidity conditions, as indicated by interbank rates hovering near the top of BSP’s interest rate corridor,” Mr. Paracuelles added.

The 4.75% key rate remains at a decade-high after the BSP fired off a series of hikes totaling 175 basis points (bp) last year, which were meant to rein in inflation expectations after price spikes surged to as high as 6.7%. Food-led inflation has softened especially as the supply of rice and other crops has normalized as a result of government intervention.

Shortly after assuming office on March 6, Mr. Diokno said he sees room to ease policy interest rates and even to trim the 18% reserve standard for banks, but noted that such decisions will be data-dependent.

In a separate report, ING Bank N.V. Manila cautioned that authorities may be waiting too long to unwind last year’s rate increases.

“With inflation falling rapidly and expected to stay within target in 2019 and 2020, the BSP may run the risk of ‘falling behind the curve’ again with inflation held in check, growth momentum slowing and policy rates still at ‘crisis’ levels,” said ING Bank senior economist Nicholas Antonio T. Mapa.

“Back in 2018, hiking aggressively by 175bps was the equivalent of whipping out a rain jacket as the downpour ensued. But now that the sun is shining brightly and El Niño upon us. Perhaps it may be time to take off the rain coat as the heat wave saps growth momentum.”

Multilateral organizations also see a respite from inflation this year, coming from 2018’s 5.2% climb that was the fastest in nearly a decade. In turn, this is seen boosting private consumption at a time that public spending is seen slower due to delays in enactment of the P3.757-trillion 2019 national budget, coupled with global uncertainty that will hit goods exports.

The International Monetary Fund and the United Nations Economic and Social Commission for Asia and the Pacific have tempered their growth forecast for the Philippines to 6.5% this year, while the World Bank and the Asian Development Bank pencilled in 6.4% for 2019.

These compare to the downward-revised government target of 6-7%, which already factors in delayed projects and programs as a result of the budget impasse. In 2018, the economy expanded by 6.2%. — Melissa Luz T. Lopez

Long-term foreign investments down for 6th month in January

FOREIGN DIRECT INVESTMENT (FDI) net inflows to the Philippines declined for the sixth straight month in January as more firms plucked out capital, still largely due to fears over global trade tensions, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday.

FDI net inflows amounted to $609 million for the month, the lowest since November and spelling a 38.2% plunge from the $986 million which the Philippines got in January 2018.

The BSP said that the lower net inflows came as equity investments slid from a year ago, and as more foreign businesses chose to withdraw their placements.

Equity capital amounted to a $45-million outflow during the month, a reversal from the $473-million year-ago inflows. This developed as gross equity inflows totaled $184 million, just a third of the $531-million placements in January 2018. At the same time, foreigners withdrew $229 million capital from the Philippines, nearly four times the $58 million repatriated previously.

The BSP said bulk of the withdrawn equity capital was from Japan-based investors, while the biggest sources of investments during the month were Mauritius, South Korea, the United States, Singapore and the Netherlands.

The central bank noted that equity capital went mainly to finance and insurance; administrative and support services; real estate; electricity, gas, steam and air-conditioning supply; and information and communication.

Meanwhile, foreign companies chose to reinvest $76 million of their local earnings in January, compared to the year-ago $71 million, marking the biggest such amount logged since September.

Foreign firms’ loans to their Philippine units grew 31% to $577 million from $441 million.

Sought for comment, one observer attributed the sustained drop in FDI net inflows to market jitters over the tariff war between the United States and China, now involving billions of dollars’ worth of merchandise exports. “It’s really the negative perception about the lingering effects of the trade squabble between the US and China, the two biggest economies today. In fact, almost all the multilaterals are convinced that this trade issue is the biggest threat to global economic growth,” said Ruben Carlo O. Asuncion, chief economist of the Union Bank of the Philippines. “I see no other underlying mover that is actually impacting global trade right now.”

US President Donald J. Trump has also threatened tariffs on $11 billion worth of European Union exports in retaliation for aircraft subsidies.

“This statement has implications for FDI levels and it may continue to put downward pressure on FDIs for the rest of 2019 and impact risk appetite moving forward,” Mr. Asuncion said.

“Investors will probably continue to stay on the sidelines and may hold back with planned investments and expansions.”

The International Monetary Fund said in its latest World Economic Outlook report that world output will ease further this year, as the global economy reels from the Sino-US trade war.

FDIs are a source of capital for the Philippine economy, spurring domestic activity by funding business expansion and generating more jobs.

BSP Governor Benjamin E. Diokno has said that he was not worried about the lower FDI haul last year, noting “a lot of interest” in the Philippines for being among the fastest-growing economies in the world.

From a record high of $10.256 billion in 2017, FDIs dropped 4.4% to settle at $9.802 billion last year. Foreign business groups attributed the paler investor appetite to jitters over higher commodity prices, the proposed changes to tax incentives and the global trade tensions.

The BSP sees foreign investments reaching $10.2 billion this year. — Melissa Luz T. Lopez

Kymco plans to build P1-B facility in Philippines

By Janina C. Lim, Reporter

KYMCO Philippines, Inc. is planning to put up a P1-billion facility in the country to boost its current capacity to meet growing demand and to allow future expansion into electric motorcycles.

In a press briefing in Makati City on Wednesday, Kymco Philippines President Allan B. Santiago said the company is looking to build the facility in north or south Luzon, particularly Laguna and Batangas due to their proximity to the Batangas port.

The local unit of Taiwan’s Kwang Yang Co. Motors Ltd. expects to start construction of the facility next year, and targets to operate by 2022 or 2023. The facility will have a monthly production of 6,000 up to 20,000 units.

“After about a decade of operations in the country, we have seen the potential and economic opportunities that the Philippines has to offer, and we believe that it is high time for us to take our presence and commitment to the next level… We are exerting more effort with our plan to bolster our investment in both the Philippine market and Filipino labor,” Mr. Santiago said.

Kymco Phillippines’ current capacity at its 250-hectare plant in Taguig City stands at 5,000 units per month. Monthly sales currently reach more than 1,500 units.

With a local market share of 3% to 5%, Kymco Philippines manufactures and assembles 125 cubic centimeters (cc) to 500cc scooters, all-terrain vehicles and utility vehicles.

The company plans to shut the Taguig plant once the new facility is operational.

“Somehow when you have new models, you need to have new facilities to have these new models. The production facility that we have right now perfectly fits the Philippines. [But] five years from now, the market might be electric. We need to have new facilities in order to manufacture and assemble those kinds of models,” Mr. Santiago said.

Recently, Kymco launched the Xciting S 400i, Like 150i and the Xtown 300i which all have the Noodoe solution, an interactive and customizable digital dashboard that can connect a smartphone for navigation.

The firm also recently introduced electric scooters under the Intelligent Open Network Electric Xperience brand, although the availability of these would depend on the establishment of charging stations and a maintenance facility.

“Maybe in the next 12 months we will have this model already,” Mr. Santiago said, adding they are in talks with companies and a government agency for the installation of charging stations and maintenance facilities.

Mr. Santiago said the local motorcycle market has been growing at an average of 10-15% for the past three years, due to the growing income of the middle class and rising foreign investments.

In 2016, the Motorcycle Development Program Participants Association, which includes Kymco Philippines; Honda Philippines, Inc.; Kawasaki Motors (Phils) Corp.; Suzuki Philippines, Inc.; Yamaha Motor Philippines, Inc., hit the 1 million mark in sales volume.

“Might be, the market for this year will be around 1.4 to 1.5 million,” Mr. Santiago said.

Megawide profit falls on construction slowdown

MEGAWIDE Construction Corp. saw its earnings drop by a fifth in 2018 due to the slowdown in the construction industry.

In a disclosure to the stock exchange on Wednesday, the diversified engineering and infrastructure conglomerate said net income stood at P1.8 billion last year, 20% lower than the P2.25 billion it reported in 2017. The company noted how its bottomline was affected by the cyclicality in the construction business, but received a boost from its growing airport operations.

Consolidated revenues also fell 21% to P15.11 billion, versus the P19.16 billion it realized in 2017.

The construction segment accounted for bulk of Megawide’s revenues at 78% or P11.81 billion, marking a 29% decline year on year. The company attributed this slower performance to projects in different stages in the order book, some of which are either winding down or in the early phases of construction.

Net income from the construction business likewise declined by 30% to P763 million, accounting for only 42% of the company’s total net income.

Despite this, Megawide noted that the new contracts it secured in 2018 reached P29.5 billion, almost three times what it had in 2017. Order backlog reached P50.9 billion by the end of the year.

“We remain highly optimistic in our construction business, especially with such a robust order book which gives us visibility for the next two to three years,” Megawide Chairman and Chief Executive Officer Edgar B. Saavedra said in a statement.

Airport operations, meanwhile, grew 30% to P2.996 billion, contributing 20% to Megawide’s total revenues. It now accounts for bulk of the company’s net income at 52% or P940 million, although also lower by 16% year on year.

The company opened the Mactan Cebu International Airport (MCIA) Terminal 2 last year, which helped boost the gateway’s total passenger volume by 15% to 11.5 million passengers. International and domestic passengers grew 23% and 12%, respectively.

Megawide cited the addition of 12 new international routes and two new domestic routes operating out of MCIA during the period. It now serves 30 domestic and 20 international destinations with six local and 19 international airline partners.

“We continue to see the growth in both international and local travel as an opportunity to promote Cebu not only as a destination but as a hub to other destinations in Visayas and Mindanao,” Mr. Saavedra said.

“We intend to make the most of these prospects by embarking on new developments within the MCIA concession area to attract more traffic and complement our existing facilities.”

The company also noted that it expects the Parañaque Integrated Transport Exchange to start contributing to revenues this year, after opening in November last year. The terminal south of Metro Manila has increased its passenger count to at least 40,000 daily, from a daily foot traffic of less than 10,000 in December.

Shares in Megawide fell 6.43% or P1.45 to close at P21.10 each at the stock exchange on Wednesday. — Arra B. Francia

Blue Eagle meets Blue Ribbon

BLUE seems to be the color of the pursuit of excellence as one of the oldest and most respected culinary institutions in the world, Le Cordon Bleu, partners with one of the premier universities in the Philippines, the Ateneo de Manila University. The partnership, called the Le Cordon Bleu Ateneo de Manila Institute (LCBAI) was launched in the university’s Arete building last week. Le Cordon Bleu was founded in 1895, providing the culinary education that shaped icons such as Julia Child. In turn, the Ateneo de Manila University has produced heroes, entrepreneurs, and politicians.

Its initial offering is the Restaurant Entrepreneurship program, under the John Gokongwei School of Management (JGSOM). The program will consist of courses in Management, Restaurant Management, and Entrepreneurship. Graduates of the degree will receive two diplomas: one from the Ateneo, and another from Le Cordon Bleu. According to a release, the Ateneo has invested around P150 million for two facilities for the joint venture: one in its Loyola Heights campus (in the Arete building), and another one in Rockwell, set to begin construction in the latter part of this year. The entire Restaurant Entrepreneurship program will cost around P1.6 million in tuition for four years.

Culinary courses in other institutions often run for only about two years, but, as mentioned, students of the program will go through the whole university experience in the Ateneo. Fr. Jose Ramon “Jett” T. Villarin, SJ, President of the Ateneo de Manila University, spoke about the new course offering, venturing into the technical, when Ateneo is known more for its academic offerings. “We’ve already seen a melding of the technical-vocational, and the academic in the world today. It used to be that we separate these things. For us, we see this place as a place of creativity. It is located in a structure called Arete (an ancient Greek word for excellence), which is the creative hub of the Ateneo.

“Creativity is not just the province of the arts… even the technical fields are capable of this kind of creativity,” said Fr. Villarin. “We asked [ourselves], ‘Why food? Why entrepreneurship?’ These are things that will build the nation.”

The students of the initial offering (numbering about 22 in the next semester) will go through the Core program of the Ateneo, a liberal arts structure encompassing language, philosophy, theology, and other such subjects. It’s hard to think about how Kant or Descartes should influence your life while you whisk a Hollandaise, but Fr. Villarin said, “I think it would be mutually enriching. This field is something that’s also new to us.

“This is something that enriches the whole human spirit,” he said. “We’re not just focusing on the technical aspect of the human being. Not just the digestive tract. I’m hopeful that this will actually spawn new questions — philosophical questions, cultural questions.” — Joseph L. Garcia

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