Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 9668

Taxing plastic bags

The House Committee on Ways and Means has approved the proposed “Single-Use Plastic Bag Tax Act,” which will impose a P20 per kilogram tax on single-use plastic shopping bags. The bill is estimated to raise about P4.8 billion annually for the government — money that will finance activities under the Solid Waste Management Act of 2000.

The issue, particularly for Environment officials, is that while they support the proposed tax, they have misgivings about imposing the levy by weight, instead of by piece. Mind you, one kilogram of plastic bags is a lot of bags, and the tax on that is only P20. Environment Undersecretary Benny Antiporda was quoted in a news report as saying that taxing by weight could even worsen rather than reduce plastic pollution.

Plastics manufacturers, to save on tax, might produce thinner bags that are of lower quality, he said. More bags to the weight can help save on tax. But thinner and lighter bags cannot be reused as often, and would be discarded faster than thicker bags. These lighter bags will just end up in landfills, unless segregated and disposed properly. Worst case, they will end up in waterways, he added.

There are at least two concerns with this proposed tax: will it significantly reduce the consumption of single-use plastic bags; and, should the tax be imposed by weight or by piece? Incidentally, the excise taxes on liquids (fuel, beer, liquor, etc.) are specific and imposed by volume (in terms of liters, etc.), while the excise taxes on cigarettes are charged per pack. The excise taxes on vehicles and jewelry are imposed per piece or unit, but based on the value of the item. How then should we do this with single-use plastic bags?

There is no doubt, as with the experience in other countries, a tax on single-use plastic bags can reduce consumption. In Portugal, for example, a plastic bag tax was imposed in 2015. A 2017 article in the journal Waste Management quoted a study by researchers at the Universidade Nova de Lisboa which showed that the tax “reduced the consumption of plastic bags at short and medium term,” and that reusable bags given by stores and supermarkets were “critical to reduce consumption.”

That study, the article noted, showed that the tax resulted in a “74% reduction [in] plastic bag consumption with a simultaneously 61% increase [in] reusable plastic bags.” However, the study also noted that since plastic bags were then reused for shopping instead of being used as garbage bags, “the consumption of garbage bags increased by 12%.”

Similar success was experienced in Ireland, where a plastic bag levy was imposed as early as 2002. In a 2007 article in the journal Environmental and Resource Economics, authors Frank Convery, Simon McDonnell, and Susana Ferreira were quoted as noting that the plastic levy reduced plastic bag use by consumers by 90%, with a corresponding reduction in littering as well.

The pending question, to my mind, is whether the plastic bag tax should be charged by weight or by piece? And on this, I support Undersecretary Antiporda’s call for a tax per piece. For the simple reason that the tax should be high enough, and somewhat more direct, to create an impact particularly on consumers.

Take the case of grocery shoppers. Assuming a P20 tax is charged per kilogram of plastic bags. One kilogram will probably account for about 100 bags, for a measly 20-centavo tax per bag. A pass-on tax of 20 centavos per bag is practically negligible to a shopper with thousands worth of groceries. But, assuming, for the sake of argument, a tax of P10 per bag, then the consumer will probably think twice about asking for a bag, right? Incidentally, in Denmark, where a plastic bag tax was first imposed way back in the 1990s, I believe a plastic grocery bag cost roughly about P25, including taxes.

But, it is also worthwhile to look into the experience of other countries that taxed plastic bags specifically based on weight. We need to make public studies and research papers and technical assessments that can help boost the argument in favor of either taxing by weight, or taxing per piece. We need legitimate scientific research and data to help craft this tax legislation.

In the case of Denmark, a tax on plastic bags beginning 1994 was imposed at the importation or manufacturing level, based on weight. Retailers pay the tax when they buy the bags, and they in turn can pass on the tax to consumers by charging them for the bags. Plastic bag use went down 66% in the first year.

Ireland, in 2002, decided on a direct tax to consumers, charging them the tax per piece at point of sale. Plastic bag use went down 90% in the first year of the tax. The tax was raised to 22 euro cents in 2007, from 15 euro cents previously, as plastic bag use went up again. But, comparing the two countries, per-piece tax seems to work better in terms of reducing use.

In England, users were required by law to pay a five-pence fee per bag, which reportedly resulted in an 85% reduction in use within six months of legislating the fee. Again, the charge was per piece, and not by weight. Using a similar fee, Wales reportedly saw a 96% reduction in use within a year. These experiences by other territories should be taken into consideration by our legislators.

Ultimately, I prefer a more integrated approach to dealing with plastic bags, which involves manufacturing itself, then to distribution, and tax on sale, plus segregation and recycling. In particular, I point to also encouraging the use of waste for energy production, or as construction and building materials, or their reuse or repurposing for new productive uses. However, in the immediate, I also think that a tax per piece will have its advantages.

However, the plastic bag tax should be seen for what it really is, a tax. It is, mainly, another source of revenue for the government, just like taxes on cigarettes, vaping, beer, liquor, fuel, jewelry, and motor vehicles, among others. They are meant primarily to raise money for the government. The taxes’ impact on consumption, and on related negative externalities, are secondary. We need more creative and ingenious ways to deal with plastic pollution.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.

matort@yahoo.com

The fundamentals of tax residency certificate issuance

Those who are familiar with tax treaty provisions know that they apply only to residents of countries which are parties to the treaty. Thus, the main documentary requirement to support eligibility for tax treaty relief is the proof of residency of the non-resident income-earner. More commonly known as a tax residency certificate (TRC), such proof of residency is a certification issued by the tax authority of the country of the income-earner, attesting that the latter is a resident of such country in the tax year concerned for purposes of the tax treaty being invoked.

On Oct. 22, Revenue Memorandum Order (RMO) No. 51-2019 was issued by the Bureau of Internal Revenue (BIR) to regulate the issuance of TRCs, preventing their misuse or abuse. In retrospect, the BIR noted that resident aliens and resident foreign corporations had been applying for TRCs for tax treaty purposes so as not to be taxed on their income derived from another State and submitting spurious contracts with foreign income payors to conceal the true nature of their transactions.

The RMO aims to monitor not only Philippine residents with foreign-sourced income by creating a database of taxpayers in that category, but also seeks to ensure that such income is properly reported for tax purposes.

Where can a TRC application be filed? Under Revenue Administrative Order 1-2019 issued on Jan. 25, the International Tax Affairs Division (ITAD) is the only authorized office to receive and process TRC applications. Those filed with any office other than ITAD is deemed not filed.

Who are qualified to apply for a TRC application? According to the RMO, only Philippine residents, whether individuals or corporations, who are subject to full tax liability on their worldwide income are entitled to claim tax treaty benefits. Thus, only resident citizens and domestic corporations are considered rightful applicants for a TRC.

On the other hand, resident aliens and resident foreign corporations are considered residents for domestic tax purposes only. Thus, they may not apply for a TRC, and ITAD will no longer accept TRC applications filed by such resident foreigners.

The RMO reiterates the requirement for taxpayers who are engaged in trade or business, or practice of profession to be duly registered with the BIR under a regular Tax Identification Number (TIN). In case the taxpayer-applicant’s TIN was issued for One-Time Transactions (ONETT) or under Executive Order No. 98, such registration must be updated by filing BIR Form 1905. The registration update is not required for those applicants registered under EO 98 with passive income of any type or with pensions from foreign sources.

What is the procedure for a TRC application? TRC processing is initiated upon the taxpayer’s submission of a letter-request to ITAD. Similar to the initial processing of tax treaty relief applications, TRC applications are to be evaluated by the ITAD Officer of the Day (OD). If the submitted documents are incomplete, the OD will issue a Notice to Submit.

The sample Notice to Submit for corporations and individuals, as annexed to RMO 51-2019, indicates the required supporting documents of a TRC application, which includes a Special Power of Attorney or letter authorizing a representative of the applicant to file and claim the TRC.

The letter request must indicate if any of the required supporting documents are unavailable or inapplicable. All documents submitted must be a certified true copy of the original. In addition, the original copy must be presented for comparison and verification by ITAD.

ITAD will verify the information stated or declared in the application through the BIR’s Integrated Tax System. ITAD is mandated to act promptly and expeditiously on all TRC applications. Normal processing time for the issuance of TRCs has been set at 14 working days counted from the date of submission of the completed documents.

However, if the ITAD Case Officer finds the need for additional documents, on top of those required under RMO 51-2019, to properly evaluate the TRC application, the TRC applicant must be notified and given sufficient time to comply.

If all requirements are in order, the TRC is issued bearing the seal of the Office of the Legal Service and duly signed by the Assistant Commissioner. Before releasing the TRC, the applicant must provide a loose documentary stamp to ITAD which the latter will affix to the TRC.

However, if based on the documents submitted by the applicant, ITAD finds that the issuance of a TRC is unwarranted, or that the documents submitted are fake, a letter of denial will be issued. Such denial stands unless and until the applicant declares the real nature of the transaction abroad and submits authentic documents.

What can taxpayers look forward to? With RMO 51-2019, ITAD will now act as the repository of documents substantiating the foreign-sourced income of Philippine taxpayers. It is likewise mandated to furnish a copy of all documents submitted by a TRC applicant to the appropriate Revenue District Office (RDO) or Large Taxpayers Division (LTD). This linkage between ITAD and RDO/LTD will enable the latter to verify if the correct taxes were paid on foreign-sourced income earned by Philippine residents and conduct a tax investigation if warranted.

RMO 51-2019 is a laudable development towards a more efficient and effective taxation system in the Philippines. As additional taxes start building up with more stringent collection measures in place, taxpayers equally expect strict observance of the rules protecting their right to the issuance of TRCs. Equitably, those qualified for relief should be issued TRCs, and those subject to tax for foreign-sourced income should be charged accordingly based on the right amount owed to the public coffers — no more, no less.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co.

 

Elizabeth K. Adaoag-Belarmino is a Senior Associate at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.

(02) 8845-27 28

elizabeth.k.adaoag@ph.pwc.com

Transformational leadership

“The only thing constant is change.”

— Heraclitus

Philosophers since ancient times recognized the certainty of change. Fast-forward to the 21st century, and this concept is evident in everything. With the advent of technology, the rate of change is exponentially faster, and it demands a considerable amount of agility for us not only to survive but also to thrive.

Our business landscape has witnessed a tremendous amount of change affecting the way we do business. This change has had an impact on the behavior and culture of the society in which these businesses operate. We have witnessed the rise and fall of businesses across all industries due to change. The shorter business life-cycles and the fast-changing consumer behavior nowadays make or break businesses regardless of size.

Our company recognizes the importance of preparing, accepting and adopting change, understanding that we now operate in a very different landscape. Just recently, our senior leaders from various parts of the world visited our operational center here in Manila to launch a big transformation initiative over the coming months and years. A series of talks, training sessions, and town hall meetings were held to cascade the ideas and concepts of the program and to encourage participation and support from all the members of the corporation. I was able to join a town hall meeting with our business unit global head and it was very informative and engaging as we learned the importance of our role, participation, and support for the initiative. Our leaders were enthusiastic during the talk and I noticed their emphasis on “transformational leadership” to make this program successful. I was intrigued by the term and I decided to further learn about it.

In 1978, leadership guru, James McGregor Burns expounded on the concept of “transformational leadership” in his book entitled Leadership. He defined the concept as a process where “leaders and their followers raise one another to higher levels of morality and motivation.” Bernard M. Bass in his 2003 article stated that transformational leadership is a leadership framework that recommends leaders to “encourage their followers to achieve extraordinary results.” The concept is very much different from the “transactional leadership” style in which the leader only promotes compliance with current organizational goals through punishment and rewards, and is just concerned with the normal and uninterrupted flow of business processes.

Sarah White a senior writer for CIO.com, wrote that transformational leaders support, inspire and motivate the members of the organization to challenge the status quo, to bring change, new ideas, and innovation that will help build and shape the future success of the company. Further, it’s a management style that gives employees more room to be creative, to find solutions to new problems and to prepare for the future — it is indeed a useful framework for motivating innovation. A framework that we need in our age of rapid change and transformation.

Examining the core definition and concepts of “transformational leadership,” I now understand why our transformation initiative needs to be successful. While we could invest heavily in technology, improve operations, set up extravagant marketing plans, and present well prepared financial plans, at the end of the day, the success of all of these will depend on our people.

Transformational leadership is a testament to the organization’s commitment to its people. I am proud to be part of an organization whose leaders do not take its people for granted. These transformational leaders recognize that people are part of the strategic direction of the company, that more than anything else, people play a huge and important part in the fruition of all of its plans and initiatives.

Looking beyond profitability, our priority is to give utmost importance to the dignity and values of people — skills that characterize transformational leaders, the kind of leaders that we all need in our uncertain and ever-changing world.

This essay was written as part of the requirement in his Strategic Human Resource Management class.

 

Jan Paolo Manalo Lipat is an MBA student at De La Salle University’s Ramon V. del Rosario College of Business.

jan_lipat@dlsu.edu.ph

Price control, fare control and tax decontrol

“If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.”

— Ronald Reagan, former US President

There are many price interventions by the government, proposed or already implemented, that set a cap or ceiling price. Like drug price control, fare surge control for transport network vehicle services (TNVS), electricity price control via primary and secondary price cap in WESM, housing rent control. Or a floor price like mandatory minimum wage and minimum fare for jeepneys and buses.

There are also indirect forms of price control like mandatory discounts for senior citizens and students. Rich or poor, they get the obligatory and forced discounts for things such as meals in restaurants and airline tickets.

The price distortion can be represented by the graph below. If there are no laws on mandatory price interventions, the market price (P mkt) and market quantity (Q mkt) will be at point A where supply meets demand.

To simplify, we assume here that consumers’ demand curve (downward sloping, lower price will lead to more quantity desired) will not move up or down, only the supply curve (upward sloping, lower price will lead to less quantity produced) will adjust.

Price control (P con), fare surge control, rent control will bring artificial lower price and formal businesses respond by reducing the supply curve to the left resulting in lower quantity (Q con) and consumer diswelfare.

Similarly, lots of taxes, old and new will raise the price of commodities and services (P tax). Like the recent higher oil tax, coal tax, sugar tax, tobacco tax under the TRAIN law. Government’s tax decontrol has a similar distortionary effect on market pricing (see graph).

Price control adversely affects the supply decision of formal businesses while encouraging the supply of informal, illegal, illicit businesses. Fare control and surge control will lead to lower quantity by legal TNVS and illegal transpo, and “colorum” vehicles fill the supply gap.

Higher prices via more taxes also distort pricing and supply. Higher tobacco and alcohol taxes for legal companies result in higher prices. Illicit, smuggled tobacco and alcohol come in because consumers want cheaper products.

Mandatory fare discounts for senior citizens, persons with disabilities (PWDs) and students in airlines, shipping lines, bus lines, TNVS, etc. will lead to demand distortion. Poor oldies and students will not fly often despite the 20% mandatory discount because they are poor; it is the richer oldies and students who will fly often. And this will lead to higher overall fares since the reduced price must be compensated for by non-senior citizens and non-students.

The best price regulator toward lower prices and/or improved quality of goods and services is more market competition, not more government price intervention.

Aside from price control, government should also stop or minimize supply control of various services and players. More supply of TNVS cars and drivers, more airplanes and boats from existing airlines and shipping lines, more competing players, will help bring down prices and fares.

Finally, government should stop or minimize its tax decontrol itch and minimize fanning, if not creating, crisis stories – climate crisis, garbage crisis, plastic pollution crisis, tobacco/alcohol/NCD crisis, sugar and obesity crisis, inequality crisis, and so on. Anywhere in the world, people are living longer and healthier as shown by rising life expectancy. Proposals like higher sugar tax, plastic tax, sodium tax are based on alarmism, not health and environment realism.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

US-China deal will be a short-term truce

By Mohamed A. El-Erian

THERE are times, including in armed conflict, when adversaries see it in their own interests to opt for a truce and sell it to the outside world as a stepping stone to a comprehensive peace. But both sides know it will be only a prelude to renewed tensions down the road.

This could well be the best way to think of the “phase one deal” between China and the United States. Yet, it’s not how the equity markets see the situation. Instead, they are pricing the deal as simultaneously improving both the immediate and longer-term economic outlook.

After a protracted negotiation process, the American and Chinese governments finally reached agreement on a rather narrow set of issues. Pending additional information, stock markets have interpreted this as constituting a meaningful and immediate de-escalation of trade tensions, driving several indexes to record levels.

The most cited benefit is removing the short-term risk of tariff increases, a development welcomed by much of the U.S. manufacturing sector. This has led some observers and market strategists to anticipate a halt to the contraction in global manufacturing, leading to higher business investment, the notably lagging components of global GDP growth.

As desirable as this is, such a favorable medium-term outcome is unlikely to materialize for several reasons.

First, the deal doesn’t address in a decisive way long-standing grievances that the U.S. (and other countries) have about certain Chinese trade practices. It’s essentially a transactional deal that exchanges higher Chinese imports of U.S. goods for removing the threat of a Dec. 15 increase in the level and scope of U.S. tariffs on Chinese goods.

Second, the deal is too narrow to reverse deep and growing bipartisan support in the U.S. for a tough stance against China, not just for economic purposes but also on grounds of national security and human rights.

Third, enforcing and verifying this deal is far from straightforward, exposing an important internal vulnerability.

Fourth, neither President Donald Trump nor President Xi Jinping seems keen to explicitly put their signatures to the agreement, leaving trade officials to sign.

Finally, the leading edge of the decoupling process – technology – continues to fuel tensions which saw China threaten Germany this week over Huawei Technologies Co.

We need only to look at some of the short-term political priorities in China and the U.S. to understand why they opted for a short-term agreement that lacks sufficient substance and robustness to pivot to a durable resolution.

Amid a noisy impeachment process and the risk of a slowing economy in the run-up to next year’s election, the Trump administration has been seeking an explicit win, as short in duration as is probably intended. China’s interest lies in gaining time to accelerate internal restructuring needed to reduce sensitivity to trade disruptions. This is especially important when short-term stimulus measures are increasingly inconsistent with longer-term structural reforms. The last thing China wants is to face the trifecta of a trade/investment/currency war at a time of huge trade vulnerability, and as the situation in Hong Kong has opened yet another area of conflict with western economies.

Judging from the price moves, the fixed income and currency markets seem to understand this better than the stock market. Specifically, the first two have been much more guarded in translating short-term relief into a longer-term lifting of the uncertainties facing global growth.

Not so for stocks, where the beneficial impact on valuation (higher) and volatility (lower) has turbo-charged that of the extremely accommodating financial conditions imposed by ultra-stimulative Federal Reserve and European Central Bank measures. Certain metrics suggest that the global central banking policy stance is the loosest since the outset of the global financial crisis. All this is enabling stocks to ignore yet another deterioration in the leading indicators for European manufacturing, as well as emerging partial signs of possible wobbliness in U.S. household consumption, by far the most important underpinning of global economic growth.

Investors should use the rise in prices to trade up in quality (particularly favoring companies with resilient balance sheets and high cash generation) and take the next step in gradually repositioning their portfolios toward the more bar-belled structure outlined in one of my prior columns.

Policymakers, rather than believe that global economic conditions will now turn from headwind to tailwind, would be well advised to press forward with domestic pro-growth reforms during this period of relative peace.

While hoping for the best, it’s better to treat the phase one deal as only a short-term truce.

 

BLOOMBERG OPINION

Peloton, Nike, Walmart and other brands get savaged online, but are fine in real life

By Sarah Halzack

FOR CONSUMER BRANDS and companies in 2019, the internet has laid bare two bewildering realities: It’s nearly impossible to stay out of politics. And when there is even a hint of political controversy, the outrage machine will spin itself into high gear.

In the last year, hardly a week went by without some company — big or small, famous or obscure — finding itself at the center of a storm of online outrage: Most recently it was Peloton Interactive Inc. for a TV ad some saw as sexist. Last month, it was the restaurant chain Chick-fil-A Inc. for announcing that its charity would no longer make donations to organizations that had been criticized as anti-gay. Months earlier, it was Walmart Inc. for changing its ammunition sales policy after a mass shooting in El Paso, Texas. Before that, it was the boutique exercise chain SoulCycle answering for a major shareholder holding a fundraiser for President Donald Trump. In June, it was Wayfair Inc., for selling furniture that ended up in a migrant detention center. In January, it was Gillette for running ads about toxic masculinity.

Such episodes prompt a flood of snarky denunciations and boycott threats on Twitter and Facebook. Eventually, after a raft of performative posts (dropping sneakers in the trash, smashing coffeemakers), the hashtag — and the media attention — fade away.

And therein lies a lesson for corporate America: There is little evidence that these spasms of internet indignation cause a retailer long-term damage. Online chatter, it turns out, is a poor barometer of real-world consumer behavior. The penalty for taking a political stand, in terms of lost sales or damaged reputation, is far lower than commonly believed — if a company can manage it in a smart way.

MORE TALK THAN ACTION
In April 2018, two black men were sitting in a Starbucks in Philadelphia waiting for an acquaintance. When they failed to order anything, a store manager eventually called police, who led them from the café in handcuffs. The incident, which was captured on video and posted on Twitter, was particularly galling for Starbucks Corp., which claims to value diversity so much it once encouraged its baristas to initiate conversations about race with customers.

The fury flowed fast and furious on social media. A sample tweet: “I’d rather drink instant then give u one more dime of my interracial family’s money. Seems it doesn’t matter to u anyway #BoycottStarbucks.”

Back in the real world, however, customers largely stuck to their caffeine routines. In the days immediately following the incident, research firm GlobalData asked U.S. adults what actions they intended to take toward Starbucks. Even then, with the story still fresh, most U.S. respondents — 61% — didn’t plan to do anything. Two weeks later, in a subsequent survey, even fewer people had actually taken any action.

The coffee chain’s shares, meanwhile, hit an all-time high in July after it recorded its strongest quarterly comparable sales since 2016. Traffic has now increased to restaurants in its Americas division for two consecutive quarters, ending a run of mostly weak performance on this measure that had dogged it since long before the Philadelphia incident.

GlobalData conducted similar surveys around Nike’s September 2018 advertising campaign with former NFL quarterback Colin Kaepernick, who had become a cultural lightning rod after kneeling during the national anthem before games in protest of police treatment of black people. The pattern was the same — 71% of U.S. adults never planned to take any action, and when the story faded from the headlines later that month, even fewer had actually done so.

ANOTHER INSTANCE OF MORE TALK THAN ACTION
Beyond these high-profile incidents, consumers generally don’t show much propensity to vote with their wallets. A Morning Consult survey from earlier this year found that less than half of shoppers have ever taken action based on a brand’s political stance.

Only 16% of consumers, the survey says, report posting to their social media accounts because of a political stance by a company. So a gusher of angry tweets about a company is likely to be coming from a subset of that 16%. This group isn’t necessarily reflective of America’s shoppers — much less any specific brand’s target audience.

Researchers at YouGov regularly survey shoppers about brands. Their data show an interesting dichotomy: When a company gets ensnared in an outrage cycle, it often sees a decline in its “buzz score,” a measure of whether consumers are hearing something positive or negative about a brand. But purchase intent, a measure of how likely a shopper is to buy from a given brand, often barely budges at all, or at least doesn’t move as drastically as the buzz score.

THE CHATTER DOESN’T MATTER
It’s not entirely surprising, of course, that outrage surfaces frequently in online discussions of retailers and consumer brands. Outrage is the default mode of so much social media conversation, whether in politics or pop culture.

But these expressions are often no more than exercises in virtual virtue-signaling. This may be considered a drawback in politics — former President Barack Obama recently criticized young people for mistaking tweeting for activism — but that’s not necessarily the case for brands and retailers. Disgruntled consumers retweet their support of a Chick-fil-A boycott, or post a meme on Facebook encouraging others to shun Target, and leave it at that.

After all, why go to the trouble and expense of replacing your iPhone after the president calls for an Apple Inc. boycott when you can just hold forth about it on the internet? Once you get validation online, says Brayden King, a professor at Northwestern University who has studied consumer boycotts, “it’s very easy to stop.”

There’s an additional consideration: The sheer volume of digital infernos makes it hard to stay focused on any one of them. It’s not just that the outrage is fleeting; it’s that it’s spread so thin.

Consider just how many targets U.S. consumers have raged against online in recent years: Home Depot, over its co-founder’s support of President Donald Trump’s campaign. Walmart, for the aforementioned gun policy and for allowing “Impeach 45” t-shirts to show up on its website. Amazon.com Inc., for its worker policies. H&M, for a photo of a kids’ sweatshirt that was perceived as racist. Gucci, for a sweater that was reminiscent of blackface. Prada, for Sambo-like monkey dolls. Target, for allowing transgender customers to use the store bathrooms that correspond with their identities. PepsiCo Inc., for a commercial that was tone deaf about the Black Lives Matter movement. Nordstrom Inc., for dumping Ivanka Trump’s clothing line. Victoria’s Secret, for its sex-bomb imagery in the #MeToo era. Jimmy John’s, for an old photo of its founder hunting elephants.

You get the idea (and that’s just a sampling of the ire against retailers that sell stuff; there is a whole other backlash against Big Tech). Again: It may be disappointing to their supporters that so many of these campaigns flame out, at least in part because it’s simply too hard for most people to stay mad about so many things at once. But for the targets of the campaigns, there is safety in numbers.

DIFFERENT ISSUES, DIFFERENT LEVELS OF RISK
Michael Jordan’s famous (and possibly apocryphal) quote — “Republicans buy sneakers, too” — neatly sums up why retailers have so long avoided wading into politics. But it is entirely possible for consumer companies to take a stand and not end up the worse for it. For one, some issues are simply not that controversial.

This issue-by-issue variance helps explain why studies seem to present conflicting data about shoppers’ attitudes. For example, the Global Strategy Group study found that 79% of respondents agreed with the idea that “corporations should take action to address important issues facing society.” Yet a Morning Consult study from earlier this year found that a majority of respondents thought corporations should “stick to what they do, and generally not get involved in political or cultural matters.”

This is likely about the phrasing. Respondents might hear “important issues facing society” and think of equal pay or the environment. When they hear “political matters,” they might think of divisive issues such as abortion or immigration.

So retailers should choose wisely which causes to champion. Sometimes this is easy, especially when brands have a clear identity and customer base. So Patagonia supports the environment, while Nike’s Kaepernick ad appeals to its young urban customers. But even if a retailer does wade (or get dragged) into a more divisive issue, there are effective playbooks.

After the El Paso shooting, for example, Walmart took a full month to revise its ammunition sales policies. And its overtures were incremental, not drastic: It said the lapsed assault weapons ban “should be debated” by Congress, for example, but didn’t go so far as to say it should be reinstated.

What were the consequences? Walmart just reported that U.S. comparable sales rose 3.2% from a year earlier in the latest quarter, a healthy increase that is on par with the growth it had been posting for two years before the incident. Executives said last month they had not seen signs of a backlash. It’s almost as if the whole thing never happened.

Dick’s Sporting Goods Inc., meanwhile, didn’t just stop selling assault-style rifles after the February 2018 mass shooting in Parkland, Florida; CEO Ed Stack wrote a book and gave interviews explaining his decision. He has said they heard from many angry customers and the company estimates it has cost it $250 million in sales.

Nearly two years later, Dick’s has returned to comparable sales growth and is even experimenting with getting out of the hunting business altogether in more than 125 stores. Sales grew in those stores in the latest quarter as it reallocated that space to other departments. And the company said its gross margin improved recently in part thanks to its pullback from the hunting category — a benefit the company would never have realized had it not taken a stand.

In the wake of the Philadelphia arrests, Starbucks closed thousands of its cafes for an afternoon of racial-bias training. The closures cost the chain about $17 million in sales, but it was a small price to pay for the message it sent that the company was taking the incident seriously.

Even political firestorms that aren’t handled particularly deftly can disappear. When Macy’s Inc. dropped Trump’s clothing line in 2015, it initially said it did so because of his “disparaging characterizations” of Mexican immigrants. Later, after Trump called on his supporters to boycott Macy’s, then-CEO Terry Lundgren cast the decision different light, saying: “If Hillary Clinton had a handbag collection, we wouldn’t be carrying that, either.” Despite the incoherence, the issue quickly faded. Macy’s has had plenty of problems in the years since, but it’s hard to argue that any of them have been the result of Trump’s call for a boycott.

The lesson may not be obvious, but it is clear: With strong strategy — or a little serendipity — outrage cycles can be a footnote, not a chapter, in a company’s history. A bunch of enraged tweets are not a gauge of consumer sentiment or evidence of an actual boycott. However hot and bright these controversies flare online, in the real world they simply don’t leave much of a burn.

 

BLOOMBERG OPINION

Shares extend climb as water stocks rebound

PHILIPPINE SHARES continued their recovery on Wednesday as water stocks surged on the back of favorable developments in their issues with the government.

The 30-member Philippine Stock Exchange index (PSEi) gained 3.22 points or 0.04% to close at 7,733.67, while the broader all shares index climbed 4.93 points or 0.10% to 4,587.99.

“Market rebounded today as listed water concessionaires recover after water regulators [said they] will renegotiate the agreement to remove the onerous provisions. Extension will continue if both parties come into agreement,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Wednesday.

Papa Securities Corp. Sales Associate Gabriel Jose F. Perez shared the same sentiment.

“The market was once again fixated on the ‘water stocks’ MPI (Metro Pacific Investments Corp.), MWC (Manila Water Company, Inc.), and DMC (DMCI Holdings, Inc.), which surged today by 9.4%, 14.17%, and 9.61%, respectively on the recent news by the DoJ (Department of Justice) that they were not planning to replace the water concessionaires,” Mr. Perez said in an e-mail on Wednesday.

“We expect continued volatility for these names in the coming days especially since price movements have been heavily event-driven,” he added.

Earlier this month, President Rodrigo R. Duterte warned water concessionaires Manila Water and Maynilad Water Services, Inc. that he wills scrap their contracts since their concession deals disadvantaged the government. All those responsible for the deals, may it be former presidents, will be charged with economic sabotage, Mr. Duterte said.

On Monday, Justice Secretary Menardo I. Guevarra said the DoJ is not considering to replace the two companies as water providers, but is renegotiating their contracts. There is still no definite date as to when the companies and the government will meet to discuss the contracts, but this will likely happen early next month.

On Wall Street, Dow Jones Industrial gained 31.27 points or 0.11% to 28,267.16, the S&P 500 index gained 1.07 points or 0.03% to 3,192.52, while the Nasdaq Composite increased 9.13 points or 0.10% to 8,823.36.

Back home, sub-sectors mostly gained, except for the financials and mining and oil counters, which fell 19.74 points or 1.06% to 1,830.39 and 16.94 points or 0.22% to 7,511.02, respectively.

Those that gained were led by services, which added 6.34 points or 0.41% to 1,534.43; holding firms rose 28.89 points or 0.38% to end at 7,499.68; industrials gained 25.05 points or 0.26% to 9,608.39; and property increased 9.61 points or 0.23% to close 4,098.89.

Some 1.49 billion issues valued at P7.80 billion switched hands on Wednesday, down from previous session’s 2.71 billion issues valued at P10.37 billion.

Net foreign outflows for Wednesday’s session totalled P1.06 billion, up from previous session’s net sales worth at P536.04 million.

Stocks that gained narrowly beat those that fell, 93 to 91, while 59 issues were unchanged. — Vincent Mariel P. Galang

Peso weakens on better-than-expected US data

THE PESO depreciated against the dollar on Wednesday on better-than-expected data on housing and manufacturing from the United States reported late Tuesday.

The local unit closed at P50.631 versus the greenback on Wednesday, weakening by 5.1 centavos from its P50.58-a-dollar close on Tuesday, according to data from the Bankers Association of the Philippines.

The peso started Wednesday’s trading session at P50.57 versus the dollar. Its weakest showing was at P50.65, while its strongest was at P50.56 against the greenback.

Dollars traded went up to $762.1 million from $670 million on Tuesday.

A trader said currency’s movement for the day was still “range-bound.”

“Tuesday’s trading looks like a technical move as we saw tight range. No catalyst event so far as we’re headed to the holidays and players are just playing the range,” he said in a phone call.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the local unit’s slight depreciation to US data and global developments.

“The peso closed weaker…after stronger-than-expected US economic data on housing starts and industrial production…,” he said in a text message.

Reuters reported that US homebuilding grew more than expected in November while permits secured for home construction edged up to hit a 12.5-year high on the back of the boost coming from lower mortgage rates.

Data from the US Commerce department released on Tuesday showed that housing starts rose 3.2% to a seasonally adjusted annual rate of 1.365 million units in November, with single-family construction surging to a 10-month high and activity in the volatile multi-family sector growing for the second month in a row.

Data for October was revised higher to show homebuilding rising to a pace of 1.323 million units, instead of advancing to a rate of 1.314 million units as previously reported.

Meanwhile, the US Federal Reserve said that manufacturing production rose 1.1% in November after a downwardly revised 0.7% fall in October. Industrial output also rose 1.1% in November after a downwardly revised drop of 0.9% in October.

Excluding motor vehicles and parts, overall industrial production and manufacturing output in November rose 0.5% and 0.3% respectively.

US manufacturing which is about 11% of the world’s biggest economy has been hit by the 17-month long trade war siege between Washington and Beijing.

For today, the trader sees the peso trading from P50.55-50.65, while Mr. Ricafort gave a forecast range of P50.45-50.75. — LWTN with Reuters

Russian Fedor Gorst wins the 2019 World 9-ball Championship in Doha

By Ted Lerner
WPA Media Officer

DOHA, QATAR — Playing with a poise, calm and skill that clearly belied his 19 years of age, Russia’s Fedor Gorst won the 2019 World 9-ball Championship today in Doha, Qatar, defeating a stingy Chang Jung Lin of Taiwan, 13-11.

The match was nothing short of a brutal marathon, lasting four hours, and the slow, grinding style of Chang only added to the supreme test of pressure and drama that seemed to accompany every rack. That Gorst was able to suck it all up against one of the greats of the last 15 years, and withstand the inevitable emotional peaks and valleys that come in a long, tiring match, will surely add to the satisfaction the young Russian must surely be feeling. There were several lead changes, and the more experienced Chang grabbed the momentum midway through. But Gorst persevered and grabbed the momentum back when it counted most, and close it out in style.

The win by Gorst will surely be extremely pleasing to his many fans. Not only is the low key and friendly Russian easy to root for, but his hard work and prodigious talent have, for the last few years, portended greatness. That Gorst pulled off the ultimate prize in pool at just 19 years of age is an absolutely stunning feat, and bodes amazingly well for the young man’s future, and for European pool as well.

For Chang, the loss was clearly a bitter disappointment that will sting for the foreseeable future. The 2012 World 8-ball champion has been one of pool’s most consistent and successful players over the last 15 years. But the World 9-ball Championship was the one title he has wanted the most. Winning in the pool world is so tough and so brutal, that opportunities like this don’t often come your way. Chang’s demeanor afterwards spoke of his realization that he let the ultimate prize slip out of his hands.

The marathon final came on the heels of two long semifinals matches played concurrently earlier in the day. In one semifinal Gorst matched up with World 10-ball Champion Ko Ping Chung in a fascinating battle of two of the sports finest young talents. Most fans had “Little” Ko the favorite as he had look implacable over the last four days. But Gorst proved to be the more resilient on this day. With little between them the first half of the match, It was the Russian who outwitted the Taiwanese winning in strong showing, 11-7.

The other semifinal featured Chang against China’s Lui Haitao in a battle of hard core grinders. Chang took an early lead and never once fell behind. Playing his methodical and calculating style, Chang turned the screws throughout and won in a relative breeze, 11-5.

The final presented the ideal story line for fans to sink their teeth into: the wily 34-year-old veteran finally on the brink of capturing the sport’s most coveted title, taking on the 19-year-old upstart looking to become the second youngest player to ever win the World 9-ball title.

With Chang in no hurry, and neither player rarely getting good looks off the break, the match started out slow and continued at a snail’s pace throughout. Chang won the first two racks. Gorst then got one back before the Taiwanese countered off of the Russian’s self snooker to make it 3-1.

The pair traded racks again to go 4-2 but then Chang, who’s slow play seemed to only create self inflicted wounds, started to falter. Gorst won the next three to grab his first lead of the match at 5-4. The Russian clearly had the momentum on his side.

Chang came back from a bathroom break a changed man, however, winning the next four racks. The Russian looked to be tiring under the slow conditions and the match threatened to get away from him. But Gorst stemmed the tide with two racks of his own, a neat break and run, then outwitting Chang in a safe battle to close the score to 8-7.

Chang countered off a foul from the Russian to move back up by two. Then Gorst found a second and third wind combined, winning the next four racks to take an 11-9 lead. It was the stuff of champions, rising to the occasion when everything’s at stake.

The Taiwanese halted the rot, winning a safety battle to close to within one. But Gorst pounded on a foul and held his nerve to move to the hill. With the tension nearly unbearable, Chang piled on the pressure with a break and run. But then, breaking for the title, Gorst calmly hit a series of tough shots that led to an open table. He coolly connected the dots and nailed a straight in 9-ball for the title.

Afterwards, Gorst couldn’t quite come to terms with what he had just accomplished, but he knew that it would soon sink in. He had endured a marathon under the greatest of pressure, and emerged a world champion with the brightest of futures.

“I don’t quite understand how big this win is yet. My game wasn’t that good in the semifinal and I don’t think I played that well in the final. But it’s an amazing feeling to pot that 9-ball. I just feel real good right now.

“There was a lot of stuff going on in my mind throughout the match. This stuff happens in long gambling matches, you’re up and down and back and forth. I was really distracted. I wasn’t paying attention at times because he was playing really slow. I tried not to think about it but I was getting angry, but then I told myself there’s nothing you can do about it.

“I got really lucky at the times when I really needed to win the rack. I wouldn’t say I won the match in a lucky way, but kind of.

“I’m sure this win will help me in the future because it proves to me that I have what it takes to play and win under pressure. You can’t win an event like this if you can’t play under pressure. So that’s a really good thing.”

For winning the 2019 World 9-ball Championship Gorst received $30,000, while Chang received $15,000. The total prize fund was $150,000.

Lhuillier lauds Cebuana Lhuillier Sports ambassadors’ 30th SEAG performance

CEBUANA Lhuillier Sports athletes showed their true mettle against their foreign counterparts after winning a combined number of two gold, three silver, and six bronze medals in softball, tennis, and swimming in the recently-concluded 30th Southeast Asian Games.

“The impressive wins of our athletes is a testament to the grit and talent of the Filipino people. Their world-class performance deserves our patronage and support. I am very proud to be part of their journey and I call on others to rally behind them to bring honor and pride to our country,” said Cebuana Lhuillier president Jean Henri Lhuillier who also sits as president of Amateur Softball Association of the Philippines (ASAPHIL) and Unified Tennis Philippines (UTP).

Lhuillier has been a moving force behind the now 10-peat SEAG softball champion, the RP Blu Girls, as well as, their male counterparts and the equally talented RP Blu Boys who ended the games with a silver podium finish at The Villages in Clark, Pampanga.

“Salamat po sa walang sawang pagsuporta po na ibinigay ninyo sa amin kasi kung wala po kayo, hindi po kami magkakaroon ng pagkakataon na ipakita ang aming talento at mag-uwi ng karangalan sa bayan,” said Blu Girls pitcher Mary Ann Antolihao. This is the first SEAG tournament for the two-time University Athletic Association of the Philippines (UAAP) Best Pitcher Antolihao.

Aside from softball, Lhuillier is also a known patron of tennis. As president of Unified Tennis Philippines (UTP), Lhuillier provides international exposure to US-based Filipino top seeds Treat Huey and Ruben Gonzales and homegrown talents Jeson Patrombon and Francis Casey “Niño” Alcantara who recently gave the country an all-Filipino finals at the SEA Games’ men’s doubles event with the tandem of Patrombon and Alcantara finishing off with a gold medal and a silver medal finish for the Huey and Gonzales duo at the Rizal Memorial Stadium in Malate, Manila.

“Sir Jean’s done such a great job supporting Ruben and I. We couldn’t have achieved so many of the things we have done without his support. He has done so much for Philippine tennis. In fact, we have progressed as players because of him and we are thankful to him and Cebuana Lhuillier for that,” said world-ranked tennis player Huey.

Lhuillier is also a staunch supporter of two-time Olympian swimmer Jasmine Alkhaldi who raked in six bronze medals and two silver medals in the SEA Games’ various team and individual swimming events at the New Clark City Aquatics Stadium in Capas, Tarlac.

“To Cebuana and most especially to Sir Jean Lhuillier, thank you so much for all the support. I wouldn’t be here without your help and I will try my best each and every day to make you guys proud,” said Alkhaldi.

Cebuana Lhuillier athletes and coaching staff were given cash incentives as a reward for their hard work and valuable contribution to the country and the Philippine sports.

Lhuillier, through Cebuana Lhuillier Sports, will continue his sports advocacy by sustaining programs that support the national teams of softball and tennis and developing grassroots programs by continuously discovering and training fresh local talents all over the country.

NBA: Pacers end Lakers’ 14-game road win streak

LOS ANGELES — Domantas Sabonis had 26 points and 10 rebounds to lift the Indiana Pacers to a 105-102 win against the Lakers on Tuesday night in Indianapolis, snapping Los Angeles’ seven-game overall winning streak and 14-game road winning streak.

Myles Turner had 16 points, Malcolm Brogdon scored 14 and T.J. Warren finished with 12 for the Pacers, who stretched their victory streak to four games.

LeBron James had 20 points, nine rebounds and nine assists, Dwight Howard made all 10 of his field-goal attempts and scored a season-high 20 points, and Avery Bradley added 13 points for the Lakers, who came in with the best record in the NBA at 24-3.

Los Angeles star Anthony Davis sat out after spraining his right ankle on Sunday at Atlanta.

With the Lakers trailing by two points, James missed a 3-point attempt with 11.7 seconds left, but the Lakers appeared to get the rebound when Rajon Rondo threw the ball off Indiana’s Aaron Holiday with 10.8 seconds remaining. However, after a review, Rondo was ruled out of bounds while still touching the ball.

Sabonis made one of two free throws to give Indiana a 105-102 lead, and Rondo missed a long 3-point try with 2.8 seconds left.

The Pacers took a 78-76 lead into the fourth quarter and held off several pushes by the Lakers before JaVale McGee took a pass from Rondo coming through the key and scored on a dunk to move the Lakers back ahead 92-91 with 6:15 left.

McGee (10 points, eight rebounds) was in the lineup in place of Davis.

The Pacers never led in the first half and trailed by as many as 10 points before scoring the first four points of the third quarter to move ahead 54-52.

Danny Green made a 3-pointer for his first points to move the Lakers back ahead 55-54, but they wouldn’t lead again until midway through the fourth quarter.

Jeremy Lamb didn’t score in the first half either, but he sank consecutive jumpers to spark an 8-0 run and extend Indiana’s lead to 67-58 with 5:38 left in the third quarter. — Reuters

Jerusalem Grand Prix

The fourth leg of the FIDE Grand Prix is being played in Jerusalem, Israel. The Grand Prix events are all KO tournaments with 16 players at the start. At each round of the tournament, players compete a best-of-two game KO match under classical time controls (90 minutes for the first 40 moves, then an additional 30 minutes play-to-finish with 30 seconds added to your clock after every move starting move 1).

If the match is tied 1-1 then you go into tie-breaks: two games at a time limit of 25 minutes + 10 second increment. If still tied then an additional two games at 10 minutes + 10 second increment. If still there is no decision then two more games at a time limit of five minutes + three second per move increment. Finally, if all else fails then a single Armageddon chess game: white receives five minutes while Black only receives four minutes. There is a two-second per move increment starting move 61. Black wins the match in case of a draw.

Each of the legs awards grand prix points as given below. After all four legs have been completed the competitors’ grand prix points are added and the top two will be seeded into the 2020 Yekaterinburg Candidates Tournament.

Winner of a leg: 8 points

Runner-Up: 5 points

Semifinal loser: 3 points

Round 2 loser: 1 point

Round 1 loser 0 point

Bonus for winning match

without tie-breaks + 1 point

So far the top results are:

Moscow Grand Prix, May 17-29, 2019

1. Ian Nepomniachtchi

2. Alexander Grischuk

3–4. Hikaru Nakamura, Radoslaw Wojtaszek

5–8. Daniil Dubov, Wesley So, Wei Yi, Peter Svidler

Riga Grand Prix, July 12-24, 2019

1. Shakhriyar Mamedyarov

2. Maxime Vachier-Lagrave

3–4. Wesley So, Alexander Grischuk

5–8. Sergey Karjakin, Jan-Krzysztof Duda, Yu Yangyi, Veselin Topalov

Hamburg Grand Prix, November 5–17, 2019

1. Alexander Grischuk

2. Jan-Krzysztof Duda

3–4. Maxime Vachier-Lagrave, Daniil Dubov

5–8. Veselin Topalov, David Navara, Peter Svidler, Yu Yangyi

Grand Prix Standings before Jerusalem are:

1. Alexander Grischuk*, 20 points

2. Maxime Vachier-Lagrave, 13 points

3. Shakhriyar Mamedyarov, 10 points

4. Ian Nepomniachtchi, 9 points

5. Jan-Krzysztof Duda*, 8 points

6. Wesley So, 4 points

Grischuk and Duda have already played in the allowed three legs out of four so they are not participating in the Jerusalem tournament. A quick analysis tells us that Alexander Grischuk is already guaranteed a place in the Candidates’ Tournament. Even if Maxime Vachier-Lagrave were to win in Jerusalem and overtake Grischuk in the final standings the Russian GM will still be no. 2 and, as I said earlier, the top 2 will qualify.

The Jerusalem Grand Prix started last Dec. 11 and will run until the 23rd. Mamedyarov was eliminated in round 1 of Jerusalem and is already out of contention. Only Maxime Vachier-Lagrave, Ian Nepomniachtchi and Wesley So (slim chances only) who all won in the 1st round are still in the running for the last seat to the Candidates.

Wesley beat the surging Chinese star Yu Yangyi in the first round. It is a masterpiece of power play — getting a slight advantage from the opening and forcing it through to a win.

Yangyi had a breakout year in 2014 when he won the 1st Qatar Masters Open tournament, beating Kramnik and Anish Giri in the last two rounds. Then he shone again as a member of the gold medal Chinese team to the Chess Olympiad. GM Yu was a major contributor to the Chinese cause, in fact he won the individual gold medal on board 3 with a performance rating of 2912, the best in the entire olympiad.

Yu Yangyi has been enjoying a second surge this second half of 2019 — beating him is never easy.

So, Wesley (2760) — Yu, Yangyi (2738) [C43]
Grand Prix Jerusalem 2019 Jerusalem (1.2), 12.12.2019

1.e4 e5 2.Nf3 Nf6 3.d4 Nxe4 4.dxe5

As our BW readers know, 4.Bd3 is supposed to be the best according to nowadays theory. 4…d5 5.Nxe5 Nd7 6.Nxd7 Bxd7 7.0–0 is the main line here, by far.

4…d5

In case you are one day playing White and your opponent surprises you with 4…Bc5!? the correct response is 5.Bc4! look at how the Hungarian GM Zoltan Almasi massacred Anish Giri’s forces: 5…Nxf2 6.Bxf7+ Kxf7 7.Qd5+ Kg6 8.Qxc5 Nxh1 9.Nc3 d6 10.Qc4 h6 11.Nd5 Rf8 12.Qe4+ Kf7 13.Bxh6 gxh6 14.Qh7+ Ke8 15.Nxc7+ Qxc7 16.Qxc7 Na6 17.Qxd6 Bf5 18.0–0–0 Rc8 19.Nd4 Rd8 20.Qxh6 Nf2 21.Qh5+ Kd7 22.e6+ 1–0 Almasi,Z (2707)-Giri,A (2714) Beijing 2011.

5.Nbd2 Nxd2 6.Bxd2 Be7 7.Bd3 c5 8.c3 Nc6 9.0–0 Bg4 10.Re1 Qd7

[10…0–0 would allow White to put an annoying bishop on f5: 11.h3 Bh5 12.Bf5!? with the equally annoying threat of e5–e6]

11.h3 Bh5 12.Bf4

[12.e6 does not work here. After 12…fxe6 13.Bb5 0–0 14.Ne5 Qc7 15.Qxh5 Rf5 White’s forces are pushed back]

12…Qe6

The play is revolving around White’s idea of e5–e6. One possible plan is to relocate Black’s knight to e6, but 12…Nd8? is refuted by 13.g4 Bg6 (13…Ne6 14.gxh5 Nxf4 15.e6! Nxe6 16.Ne5 is strong) 14.e6! Nxe6 15.Ne5 Qd8 16.Qa4+ Kf8 17.Bxg6 hxg6 18.Nxg6+ with a winning attack.

13.Be2!

Wesley’s novelty, and it is strong. There is a tempting alternative here: 13.Qc2? Bxf3 14.Bf5? but it is refuted by 14…Be4! winning a piece.

13…0–0

Offering an exchange sacrifice, but Wesley is not obligated to accept it.

14.Qd2!

Accepting the sacrifice with 14.Nd4 Bxe2 15.Nxe6 Bxd1 16.Nxf8 is not so convincing. After 16…Ba4 (16…Bc2 17.Nd7 Nd8 18.e6 Nxe6 19.Bd2 Rd8 also offers decent compensation.) 17.b3 (17.Nd7? Nd8 the idea behind Black’s 16th move. The white knight is trapped) 17…Bb5 18.a4 Bd3 19.Nd7 Rd8 20.e6 fxe6 21.Ne5 Nxe5 22.Bxe5 Bc2 I do not think White has any advantage here. Take note that the b3 pawn cannot be saved: 23.b4? cxb4 24.cxb4 d4! Black is the one playing to win.

14…Bg6 15.Rad1

As I have just shown you the past few moves seem to be quiet development but there is a lot of turbulence beneath the surface. And what has Wesley achieved from his deadly accurate play in the opening? Just the more active pieces. But that is enough for him to work with.

15…Be4

Black had to defend d5, and 15…Rad8 does not seem to work: 16.Ng5 Bxg5 (16…Qf5 17.Bg4 Qc2 18.e6 Qxd2 19.exf7+ Bxf7 20.Bxd2 Black’s position has not yet properly untangled) 17.Bxg5 Rd7 18.b3! (so that …d5–d4 becomes unpalatable for Black because of Bc4) 18…Re8 19.f4 h6 20.Bh4 followed by Bf3 puts a lot of pressure on Black’s center.

16.Ng5! Bxg5!

[16…Qf5? 17.Bg4 Qg6 18.Nxe4 dxe4 19.Qd5 White wins a pawn at the minimum]

17.Bxg5 h6

[17…Nxe5? 18.f3 Bf5 19.Qxd5 material is already equal but Black is about to lose at least another pawn]

18.Be3 d4 19.cxd4 Rfd8 20.Qc3! Qg6

Just in case Wesley overlooks the mate threat on g2.

21.g3 cxd4 22.Bxd4 Qe6 23.Kh2 Rac8 24.Qe3 Bf5 25.Bc3 Rxd1

Yu Yangyi did not like 25…Bxh3 26.f3 (threatening to trap the bishop with g3–g4) 26…Bf5 27.g4 Bc2 28.Rxd8+ Rxd8 29.b3! followed by Bc4 keeps up the pressure on e6.

26.Rxd1 Qxa2 27.g4 Be6

Yu Yangyi is a very tough defender. Putting the bishop on e6 was his main idea. Now if White tries to continue the offensive with 28.f4 then 28…Ne7! 29.f5 Nd5 introduces unwanted complications.

28.Qe4!

Introduces the new threat of Rd6 followed by Bd3.

28…Ne7 29.Qxb7

Wesley decides there is no harm in grabbing a pawn. He could also have proceeded with his plan of 29.Rd6! g6 30.h4 and Black is at a loss for a proper defense.

29…Nd5 30.Bd4! a5 31.Bf3 Qc4 32.b3 Qc2 <D>

POSITION AFTER 32…QC2

Out of a supposedly “dull and boring” Petroff Wesley has put pressure on Yu Yangyi’s position and he does not let up here.

33.Bxd5! Bxd5 34.Qxd5 Qxd1 35.e6!

The attack is not yet over.

35…Qc2 36.exf7+ Kh7?

[36…Kf8 was the only way to keep the game going. 37.Qd6+ Kxf7 38.Qd7+ Kf8 39.Qxg7+ Ke8 40.Qe5+ Kd7 41.Qd5+ Ke7 42.Qxa5 Qc7+ 43.Qxc7+ Rxc7 We get an ending where white has a bishop and 3 pawns against black’s rook. White should win although of course there are a lot of technical issues]

37.Qe5 Qg6 38.Qe7! 1–0

The pawn will queen.

Wesley So’s opponent in round 2 is Ian Nepomniachtchi. There are no ifs or buts about this, Wesley has to defeat the formidable Nepomniachtchi without going into tiebreaks to keep up his Candidates’chances.

 

Bobby Ang is a founding member of the National Chess Federation of the Philippines (NCFP) and its first Executive Director. A Certified Public Accountant (CPA), he taught accounting in the University of Santo Tomas (UST) for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.

bobby@cpamd.net

1...9,6679,6689,669...13,813Page 9,668 of 13,813
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube