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Fed Chair Powell repeats vow to act ‘as appropriate’

ZURICH — The US Federal Reserve will continue to act “as appropriate” to sustain the economic expansion in the world’s biggest economy, Fed Chair Jerome Powell said Friday in Zurich, sticking to a phrase that financial markets have read as signaling further interest-rate reductions ahead.

“Our obligation is to use our tools to support the economy, and that’s what we’ll continue to do,” Mr. Powell said at the University of Zurich.

Still, he said, “We are clearly at a time where there is a range of views” among Fed policy makers meeting Sept. 17-18 to decide on rates.

Powell’s careful wording reflects a split within the US central bank about how best to respond to an economy where the job market and consumer spending are strong but rising trade tensions between Beijing and Washington, Britain’s possibly messy exit from the European Union, and a broad global slowdown pose risks.

Boston Fed President Eric Rosengren for instance has made the case for leaving rates where they are until those risks are more tangible in the economic data.

Others including St. Louis Fed President James Bullard have called for a half-a-percentage point interest-rate cut to get ahead of the trade war risks and bring the Fed’s policy rate more in line with market expectations. Meanwhile, financial markets are betting Fed policy makers will agree to split the difference and follow their quarter-point rate cut in July with another one later this month.

Mr. Powell said policy makers will be closely watching geopolitical risks, financial conditions, and other incoming economic data as they weigh what to do.

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Fed officials are particularly focused on whether a drop in business spending and a manufacturing slump brought on by rising trade uncertainty is spreading to other parts of the economy. Factory activity declined in August as US President Donald Trump ratcheted up tariffs on imports from China, and China retaliated in kind.

Fed research published earlier this week estimated that trade uncertainty could shave about $200 billion from US gross domestic product by early 2020, as companies hold off on investments.

But so far there are few signs the uncertainty is translating into job loss. US job growth slowed more than expected in August, a government report showed Friday, but strong wage gains and a rebound in hours worked suggested resilience.

Mr. Powell, who spoke a few hours after the jobs report, said it was his expectation the US and world economies would continue to grow moderately and would avoid any recession.

But there are also troubling signs in financial markets, most notably an inversion of the Treasury yield curve, which historically has pointed to a recession 18 months to two years ahead. The Fed’s target range for its benchmark policy rate, now 2% to 2.25%, exceeds yields on nearly all Treasuries.

Trump on Friday kept up his call for the Fed to lower interest rates, saying policy makers were wrong to raise them last year.

Powell for his part said he wasn’t listening to Mr. Trump, or to a call from former New York Fed President Bill Dudley for factoring the 2020 presidential election into his rate-setting decisions.

“Political factors play absolutely no role in our process, and my colleagues and I would not tolerate any attempt to include them in our decision-making or our discussions,” he said. “We are going to act as appropriate to sustain the expansion.”

Mr. Powell’s remarks are the last publicly scheduled comments from a US central banker before the Fed’s September meeting. — Reuters

China sugar industry to lobby for extension of hefty tariffs

BEIJING — Chinese sugar mills plan to ask the nation’s Ministry of Commerce to extend hefty tariffs on sugar imports that Beijing imposed in 2017 to protect China’s struggling domestic sector, according to two sources and a draft document viewed by Reuters.

The plan to request an extension of the tariffs was discussed at a meeting organized by the China Sugar Association on Thursday.

Beijing’s trade measures on sugar imports, set to expire on May 21, 2020, “have played an effective role in safeguarding the interest of the domestic industry, and promoting healthy and stable development of the sector,” said the draft document that was dated Sept. 5.

China’s domestic sugar sector has struggled to compete with foreign rivals due to higher production costs. Chinese white sugar prices CSRc1 also plunged in 2018, amid a global supply surplus, pushing many producers into the red.

The Guangxi Sugar Association, in China’s top producing region for the sweetener, will submit the application for the extension of the tariffs on behalf of the entire domestic sugar industry, according to the document.

A source familiar with the matter confirmed that the industry group is consulting lawyers and experts, and drafting the application to be submitted to the government.

It is not clear when the Guangxi association will submit the plan or what Beijing’s response will be, as other major sugar exporters continue to pressure China to drop the trade measure to curb imports.

“The safeguard measures are a very complicated issue. Application is still only an plan. It is not easy to extend (the measures),” said one of the sources who was briefed on the plan.

Separately, China Sugar Association will also look into the possibility of an anti-dumping and anti-subsidy investigation into imported sugar products, according to a second draft document discussed at the Thursday meeting.

Some sugar exporting countries and regions have exported sugar products at below cost prices, or with subsidies, which has damaged China’s domestic sugar industry, the document said.

The draft does not outline proposed tariff rates if the safeguard measures are extended.

China in May 2017 hit major exporting nations with hefty tariffs on sugar shipments after years of lobbying by domestic mills. Beijing started to levy extra tariffs on out-of-quota sugar imports from all origins last August.

China allows 1.94 million tonnes of sugar imports a year at a tariff of 15% as part of its commitments to the World Trade Organization. Out-of-quota imports are charged a higher tariff and need special permits.

Imports beyond 1.94 million tonnes attract a 50% levy. The 2017 ruling added an extra 45% duty to these imports in that fiscal year, taking the total to 95%. The rate fell to 90% 2018–2019 and 85% in this year to 2020. — Reuters

Hong Kong expats eye exit as protests threaten ‘World City’

LIKE many expatriates in Hong Kong, Madeline Bardin is thinking more and more about leaving.

The 36-year-old entrepreneur has thrived in the city for seven years, but she worries that its summer of unrest isn’t going away anytime soon. She won’t go outside with her 8-month-old son without first checking chat groups and the news for reports of tear gas, and she recently canceled a business trip on concern that protests at the airport might prevent her from returning home.

“We have a young family to think about and we think this is just the beginning of the changes in Hong Kong,” said Ms. Bardin, who moved to the city from London in 2012. “Long term, it just doesn’t make sense for us to stay here with the rising instability.”

Hong Kong’s ability to assimilate people from around the globe has helped turn the former British colony into one of the world’s biggest financial and commercial hubs. But that status is increasingly under threat as expats and their employers weigh the costs of committing to a city mired in its worst political crisis since the handover to China in 1997.

If people like Ms. Bardin decide to leave, it could do significant damage to an economy that hosts the world’s fourth-biggest stock market and regional offices for hundreds of foreign companies.

Fitch Ratings Ltd. cited Hong Kong’s deteriorating international reputation as one reason for downgrading the city’s credit rating on Friday, saying that public discontent is likely to persist even after Hong Kong Chief Executive Carrie Lam withdrew the controversial extradition bill that first sparked the demonstrations three months ago.

Just a few hours after the Fitch statement on Friday, police used tear gas in a populated area to disperse protesters who dismantled traffic lights and started fires. On Saturday, protesters blocked a main road in Mong Kok, a busy shopping and residential district, and burned a barricade near the police station before being chased off by hundreds of riot cops.

Hong Kong has long attracted international bankers, lawyers and other professionals with its energetic urban lifestyle, negligible crime rate and low taxes — a combination that convinced expats to stomach sky-high rents and cramped living spaces. At the end of 2018, the territory had more than 650,000 foreign residents, in addition to the more than 1 million people from mainland China who have settled in the city of 7.5 million since 1997.

While Hong Kong’s government doesn’t publish comprehensive immigration statistics frequently enough to gauge the full impact of this year’s unrest, there are signs that foreigners are cooling on the city.

Applications for general employment visas dropped 7% in August from a year earlier, after rising on an annual basis for most of 2019, according to official figures. The number of mobile residents — those who recently spent between one and three months in the city — fell 4.1% in the first half, the biggest decline in a decade.

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Online forums now often feature expats debating whether to leave Hong Kong to give birth, whether it’s safe to let their kids take mass transportation, and whether to move out of the city for good. Many worry that Beijing is chipping away at the “one country, two systems” framework that gives Hong Kong certain freedoms unavailable in Communist China. The extradition bill would have exposed both Hong Kongers and foreigners to the risk of being sent to the mainland to face what the US State department has called China’s “capricious” legal system.

Hong Kong’s status as “Asia’s World City” was based on “values that are eroding quickly as Beijing exerts more and more influence in Hong Kong, especially in recent years,” said Lo Kin-hei, vice chairman of Hong Kong’s Democratic Party. “If these values are gone, those names and status Hong Kong enjoys now will be gone forever.”

For all its challenges, Hong Kong has plenty of foreigners committed to the city for the long haul. Some argue that the turmoil has had minimal impact on their day-to-day lives and that Hong Kong will weather the storm just as it did during Asia’s financial meltdown in the late 1990s and the SARS outbreak in 2003. Several foreigners have been notable fixtures at the demonstrations, offering support to protesters, live-streaming clashes with police on Twitter, and in at least one case drawing the ire of pro-Beijing lawmakers.

Others are reluctant to leave for economic reasons. In a survey of 982 Filipino domestic helpers conducted by HelperChoice, a recruitment platform, 45% said they were worried about the protests but not enough to leave Hong Kong, where salaries are often far higher than in their home country, the South China Morning Post reported.

Hong Kong’s government knows the city’s reputation is at risk. This month, it took out full-page ads in international newspapers that said: “We remain a safe, open, welcoming and cosmopolitan society and an internationally connected, vibrant and dynamic economy. We will no doubt bounce back. We always do.”

While Hong Kong did return to normality soon after the Occupy Central movement fizzled in 2014, this year’s demonstrations have had a more dramatic impact. Not only have they spilled from the city’s streets into the airport, subways, shopping malls, and schools, they also threaten to tip the economy into a recession as retail sales and tourism plunge.

The outlook could get worse if the trend toward increased violence by some protesters persists. Hong Kong’s government hasn’t ruled out invoking the city’s emergency law, which could allow it to disrupt Internet service and seize property. Meanwhile, China has signaled repeatedly that it could send in the People’s Liberation Army if necessary to quell the unrest.

Professionals who moved to Hong Kong from mainland China share many of the same concerns about stability as Western expats. But some are also souring on the city for different reasons.

One common gripe is that native Hong Kongers have become less welcoming to people from the mainland as the protests have escalated. A Chinese banker who has lived in the city for almost a decade, and who asked not to be named discussing a sensitive issue, said his wife has ordered him not to speak Mandarin in public. The couple had planned to retire in Hong Kong, where locals speak Cantonese, but are now considering Shenzhen instead.

Jason Tan, a director at recruitment agency Kelly Services in Shanghai, said he’s fielding as many as 20 calls a day from financial professionals who’ve been in Hong Kong for a few years, but now want to move back to China. “Candidates are looking for greener pastures,” he said.

Even as they question how long they should remain in Hong Kong, daily life goes on for most foreigners who work in the city. On a recent Saturday, as demonstrators lit a massive fire outside a police station and engaged in some of their most violent clashes since the protests began, a group of mostly western expats attended a children’s birthday party about a mile up the road.

While conversations at the party inevitably touched on the unrest and how the situation might play out, attention eventually turned to more practical considerations. Babies’ noses needed wiping, a mess on the floor had to be cleaned, and a toddler’s tantrum had to be dealt with. — Bloomberg

Nissan comes to Bacoor City

NISSAN PHILIPPINES, INC. (NPI), together with LICA Auto Group, have officially started construction on Bacoor City’s first Nissan dealership in Molino. Bacoor City Councilor Alde Pagulayan joined executives from Nissan Philippines and Tetra Sales & Services, Inc. for the dealership’s ground-breaking ceremony.

“This occasion marks Nissan’s continued commitment to bring the future of mobility to the Philippines. The new Nissan Bacoor dealership will enable us to reach more customers to provide them innovative products and reliable after-sales services,” says NPI President and Managing Director Atsushi Najima, during the ceremony.

The 1,512 sq.m. dealership will feature a 912 sq.m. showroom, and a 600 sq.m. service area to cater to consumer needs and provide the highest level of service.

Yields on government debt end higher on profit taking

By Marissa Mae M. Ramos
Researcher

YIELDS ON government debt securities ended higher last week as profit taking prevailed among market players ahead of the release of August inflation data.

Debt yields — which move opposite to prices — went up by an average of 6.2 basis points (bps) week on week, the PHP Bloomberg Valuation Service Reference Rates as of Sept. 6 published on the Philippine Dealing System’s website showed.

The secondary market saw mixed movements in terms of yields. At the short end of the yield curve, the 91-, 182-, and 364-day Treasury bills (T-bill) went down by 1.9 bps, 6.6 bps, and 0.6 bp, respectively, to fetch 3.3%, 3.452%, and 3.681%.

At the belly, rates of the two-, three-, four-, five-, and seven-year Treasury bonds (T-bond) went up by 0.3 bp (3.907%), 3.1 bps (4.023%), 6.3 bps (4.146%), 9.4 bps (4.267%), and 13.7 bps (4.459%), respectively.

At the long end, yields on the 10-, 20-, and 25-year T-bonds climbed 12 bps, 15.8 bps, and 17.2 bps to 4.579%, 4.971%, and 4.962%.

In an e-mail, ATRAM Trust Corp. Head of Fixed Income Jose Miguel B. Liboro said the recent uptick in yields “has largely been a reaction to global developments.”

“With inflation continuing to trend lower and at least one additional and at least one additional [interest] rate cut and [reserve requirement ratio (RRR)] cut expected from the Bangko Sentral ng Pilipinas (BSP), investors are looking to outside factors for further cues,” Mr. Liboro said.

“The recent sell-off on the back of US Treasuries prompted market actors to lighten on positions, especially given the very strong run that local bonds have had,” he added.

Meanwhile, a bond trader attributed last week’s bond movements to profit taking.

“Yields were generally higher this week as local participants opted to take profits from the rally in bond prices due to the escalation of US-China trade tensions… This was also driven by some positioning ahead of the August inflation report…,” the bond trader said.

The bond trader added that the upward movement of yields was also supported by “positive geopolitical developments abroad” in Hong Kong, Italy, the United Kingdom.

“Toward the end of the week, markets also cheered the scheduled bilateral trade discussions between the US and China [next month],” the bond trader added.

Government data released last Thursday showed Philippine inflation moderating to 1.7% in August — its slowest pace in three years or since the 1.6% in August 2016.

Reacting to the result, BSP Governor E. Diokno said this was “excellent news,” adding the BSP’s Monetary Board (MB) will take this “positive development” into consideration in its Sept. 26 policy meeting.

Last month, Mr. Diokno has already hinted on a possible 25-bp cut in benchmark rates as well as another cut in big banks’ RRR as early as the upcoming MB meeting.

On the external front, representatives from the US and China are set to meet by mid-September to prepare for more trade talks in October. The timing of the announcement came about as the US imposed a fresh 15% tariff on Chinese goods, with China doing the same on some US goods on a $75-billion list.

Meanwhile, Chinese Premier Li Keqiang was quoted last Friday in news reports as saying Beijing supports the Hong Kong government’s move to withdraw the controversial extradition bill, which ignited three months of protests in the former British colony.

In the United Kingdom, British Prime Minister Boris Johnson will try to call a snap election on Wednesday after lawmakers seeking to prevent him from taking Britain out of the European Union without a divorce deal dealt him a humbling parliamentary defeat last week.

Mr. Johnson has previously promised to take the UK out of the EU on Oct. 31 with or without an agreement.

“Given the volatility in global bond yields and the uncertainty of what type of bond supply there could be in the fourth quarter, T-bills have continued to offer investors a low-risk place to park their cash,” ATRAM’s Mr. Liboro said, adding that T-bills have “remained an attractive option for those looking to stay liquid” given that banks’ time deposits have lowered their rates significantly from last year.

Nike’s risky stand on Kaepernick was a win

By Sarah Halzack
Bloomberg Opinion

A YEAR AGO last week, Nike Inc. inserted itself into a smoldering cultural and political controversy: It unveiled an advertising campaign celebrating Colin Kaepernick, the former NFL player who had protested police treatment of African-Americans by kneeling during the national anthem.

Almost immediately, there were social media rumblings about a Nike boycott and chatter about whether the ad was a mistake. President Donald Trump said at the time that the athletic apparel giant sent “a terrible message” with the ad, prompting speculation about the potential for a shopper backlash.

Now the impassioned rhetoric and outraged hashtags are all but forgotten. With the benefit of hindsight, it’s clear that the ad campaign — or the uproar that followed — hasn’t hurt Nike at all.

Nike remains an extremely popular brand. In UBS’s latest annual survey of US consumers about athletic brands, Nike received the highest “net promoter score,” a common industry metric meant to capture how likely shoppers are to recommend a brand to a friend. UBS’s survey also found that shoppers’ perceptions of Nike have largely improved or remained unchanged since last year’s survey, which was conducted prior to the Kaepernick controversy.

Another investment bank research report shows enthusiasm for Nike footwear. A Stifel report from August analyzed feedback from more than 100 sneaker retailers about what was in demand during the crucial back-to-school shopping season. Nike was the most popular style in 81% of those store checks, up from 67% during the back-to-school rush last year.

It’s no wonder, then, that Nike’s North America sales growth has been solid since the Kaepernick ad. In fact, this division looked much healthier in the fiscal year ended May 31 than it did the year before.

And what about investors? They have stuck by the company, too. Shares are up nearly 8% since the last trading day before the Kaepernick ad was revealed. Nike’s shares generally have moved with the broader S&P 500 Index in the past year — suggesting that when they did retreat, it was more a reflection of larger market or economic concerns.

Finally, it’s worth noting that in the week after the debut of the ad, none of the analysts tracked by Bloomberg downgraded the stock. Today, the company has more buy ratings than it did a year ago. It is in good shape.

Nike’s experience shows that it is plenty possible for a corporation to take a stand on a politically sensitive issue and not get burned — so long as the foray is well-executed and feels authentic to its longstanding image.

It’s a lesson worth keeping in mind as Walmart Inc. undertakes new efforts to curtail sales of ammunition following a mass shooting at one of its big-box stores. Of course, these are not perfect parallels. It’s difficult to measure, but it is possible that Nike remained unscathed in part because it took a stand that was broadly popular with people who already like Nike. Given Walmart’s deep roots in rural America, it may find its new gun policies are not easily embraced by some of its core customers.

Still, both retail giants are beloved by millions and enjoy decades of accumulated goodwill and shopper trust. In Walmart’s case, it is often the most conveniently located and best-priced store in town. Walmart can count on those attributes to overcome any qualms among shoppers about its politics.

Canada takes first formal step at WTO to challenge China’s canola ban

OTTAWA — Canada, locked in a major dispute with Beijing, is taking the first formal step at the World Trade Organization to challenge China’s decision to block Canadian canola exports, Trade Minister Jim Carr said on Friday.

China, angry at Canada’s detention of a top Huawei Technologies Co Ltd executive last year on a US arrest warrant, blocked all imports of canola seed in March on the grounds they contained pests.

“We have continuously been engaging with China at multiple levels. The issue is that we’re not seeing progress fast enough and as we would with any trading partner, this is the next step,” Carr spokesman Michael Jones said.

Carr said in a statement that Ottawa was seeking bilateral consultations with China at the WTO. Under WTO rules, Canada and China should meet within 30 days, and if these talks fail, Canada can request adjudication by a panel.

The WTO timeline means there is slim chance of a resolution before Canadians vote in a federal election on Oct. 21.

Polls show Prime Minister Justin Trudeau’s Liberals face a tough fight against the opposition Conservatives. Conservative leader Andrew Scheer, who has strong political support from Canada’s agriculture community, has attacked the prime minister for being weak in his dealings with China.

“I told Trudeau to take China to the WTO immediately. He had to think about it for over 120 days,” Scheer said on Friday, citing an April statement in which he called on Trudeau to launch a formal WTO complaint against China.

In 2018, Canada exported C$2.7 billion ($2.1 billion) worth of canola seed to China, a market that accounted for approximately 40% of all Canadian canola exports.

Canadian canola stockpiles surged to an all-time high this summer amid slumping sales to China.

“We’re disappointed that this action needed to be taken, but it is a necessary step,” said Jim Everson, president of the Canola Council of Canada.

In May, Ottawa extended a federal loan program to offer more financial assistance to canola seed farmers. China has also blocked imports of Canadian pork and beef.

John Guelly, chairman of the Alberta Canola Producers Commission, said the WTO move was “definitely something we’ve been asking for some time.”

Normally at this time of year, Guelly has sold up to one-third of his new harvest through contracts for forward delivery. This year, he has sold none of it.

Carr made his announcement a day after Foreign Minister Chrystia Freeland said both Canada and China had formally approved each other’s choice of new ambassadors. — Reuters

Peugeot provides free highway RFID to all customers

IN THESE DAYS of continuously worsening traffic, absolutely nothing compares to a stress- and worry-free road trip. With the abundance of scenic places spread out through both North and South Luzon, the mere thought is at the very least an enticing one.

Now imagine traversing the North Luzon Expressway (NLEX) and the South Luzon Expressway (SLEX) in a breeze and in the comfort of a vehicle that has earned more than 40 international awards. Finally imagine NLEX, SLEX, and Peugeot Philippines coming together to make all that a reality.

Peugeot Philippines, together with RFID providers AutoSweep (SLEX) and Easytrip (NLEX), recently came together to launch service that makes going on that relaxing road trip a given.

“We at Peugeot Philippines are very proud of the world-class products that we offer. And so we asked ourselves, ‘How do we enhance the Peugeot ownership experience? How can we make our customers feel even better?’ That’s how we came up with the idea of partnering with both major thoroughfares in Luzon. We’re glad to have great partners in both AutoSweep and Easytrip,” said Glen Dasig, president of Peugeot Philippines.

Thanks to the new program, customers of Peugeot will have the AutoSweep and Easytrip RFIDs conveniently installed in their units upon delivery. This will save them the trouble of having to go to an authorized station for installation. The RFIDs will have a preliminary load of P500 worth of credits for each RFID.

AutoSweep provides convenient cashless transactions for vehicles plying SLEX. The partnership is a welcome development for AutoSweep, whose goal is to help ease the congestion in Southern Manila and its nearby provinces.

Installing the RFID on a new Peugeot

“In removing the need to stop and pay in cash, we at AutoSweep are effectively making our highways more efficient and traffic-free,” AutoSweep Head of RFID Operations Grenalene “Nelly” Argota said. “RFID is a cashless and electronic mode of payment hence no more scrambling for cash at the toll gates. It is faster than cash, lasting only 2-3 seconds at the tollgate. This is why we are proud to partner with Peugeot Philippines in their campaign,” she added.

Peugeot is also proud to partner with Easytrip Services Corporation, the exclusive electronic toll collection system provider that manages 400,000 customers in NLEX, Subic-Clark-Tarlac Expressway (SCTEX), and Cavite Expressway (CAVITEX).

“We are happy to be working with Peugeot on this project. Not only is it allowing us to reach more motorists, but it also strengthens our objective of delivering various solutions in the smart mobility service platform,” said Easytrip President and General Manager Eugene Antonio.

“Convenience is one of the benefits that Peugeot wants to give customers. This is something they have in common with Easytrip, added Jay Calma, head of Accounts for Easytrip. “We want to provide the motoring public as much convenience as possible and improve their experience in the vehicle, in driving and the overall travel. This partnership is one of the ways to extend the benefit to the customers. A Peugeot customer right after he gets his car already has the Easytrip RFID sticker on his vehicle, with P500 load activated and he can just drive to the Expressway from the dealership with no hassle at all,” he added.

Peugeot Philippines is the first car company to include RFIDs to both North and South Luzon as part of the vehicle package. The project is one of many customer-centric initiatives that the company will be launching this year. “It’s all about our customers. Any vehicle will take one from point A to point B in relative comfort. Only a car company truly devoted to customer satisfaction will go out of its way to offer services that go beyond what a vehicle alone can offer,” ended Dasig.

Apple disputes Google description of a widespread iPhone attack

APPLE, INC. disputed a recent Google security report that described an iPhone malware attack as “en masse.”

The Cupertino, California-based technology giant said Friday that the attack — which used malware to target iPhone users who visited certain websites — was limited to “fewer than a dozen websites.” The company also confirmed that the attack targeted the Uighur Muslim community in China.

Apple said Google’s post last week on its findings came six months after the issue was patched in iOS, the iPhone and iPad operating system, and added that the attacks were in place for “roughly two months, not ‘two years’ as Google implies.”

Later on Friday, Alphabet Inc.’s Google responded to Apple’s statement, saying it stands by “our in-depth research.”

The company’s Project Zero “posts technical research that is designed to advance the understanding of security vulnerabilities, which leads to better defensive strategies,” Google said in a statement. “Will continue to work with Apple and other leading companies to help keep people safe online.” — Bloomberg

Meet the company behind Wackie and Cheep chips

By Jenina P. Ibañez

THE most buzzed about flavor of Wackie Corn Chips is salted egg.

Melito “Lito” C. Chua, president and co-founder of food manufacturing brand Yan Yan International (Phils.), Inc., said that he had tried different snacks from his travels and mixed numerous flavors on corn chips before creating the salted egg flavor he deemed the “best.”

While other snack food brands have salted egg flavored potato chips, Mr. Chua said his company is the first to produce salted egg flavored corn chips in the world.

Mr. Chua and his wife Melissa started Yan Yan in 2003 as a family business born out of a love for food.

“I went to a lot of restaurants, diners, and even the carinderias to understand what the Filipino loved,” Mr. Chua was quoted as saying in a press release.

The couple did much of the work themselves: testing, stocking, itemizing, and distributing. They now produce more than 150 products at six manufacturing plants, and sell their goods at convenience stores and grocery chains, including Ministop and SM.

Their products include Harry chocolate bars, Cheep chips, Goody root beer, Brewster’s coffee, Happy Marie biscuits and Melle’s breads.

Yan Yan began exporting around five years ago, and now move their goods to Southeast Asia, Canada, Japan, and Korea. They showcase their products at international exhibitions, then tap into a large overseas Filipino market.

Yan Yan Marketing Consultant Grace E. Isip attributed this to the founder’s penchant for incorporating flavors Filipinos love, a habit that paved the way not just to local success, but also international expansion.

Lito Chua, Yan Yan International (Phils.), Inc. president, welcoming the media during the event.

“We began with Filipino buyers,” Ms. Isip told reporters in Filipino at a press event launching their newest products. “And then they open [the products] and say, ‘it’s like our food back home.’”

Yan Yan produces corn snacks, fish crackers, and buko pandan and gulaman-flavored juices.

Filipinos abroad began recommending the Yan Yan’s products to other Filipinos, selling these at Filipino stores, and spreading the word to locals. South Korea is their biggest export market.

In the Philippines, Yan Yan is hoping to boost brand name recognition. Ms. Isip said consumers may be familiar with their snacks sold in sari-sari stores, such as the Lumpia Shanghai Cereal Rolls and Karoke corn snacks, but do not know the brand itself.

She added that Yan Yan is aiming to become one of the top five food and drink manufacturers in the country, through “very aggressive distribution.”

However, the snack food manufacturer may face challenges, as the public becomes more health conscious. A Kantar report earlier this year said that Filipino consumers are turning to healthier snacks like fresh fruits. Some Metro Manila cities are implementing ordinances that ban “junk food and sugary drinks” inside and within 100 meters of schools.

Yan Yan officials said that they sell products such as crackers and breads that work within the guidelines of the ordinances at schools, and their juices follow the formulation prescribed by Department of Education (DepEd). DepEd discourages the sale of soft drinks as well as processed juices with more than 20 grams of sugar per serving.

Yan Yan also works directly with local farmers to ensure the use of fresh ingredients. For instance, their corn chips are flavored with real salted eggs, not artificial ingredients.

Now, Yan Yan is working on expanding locally and abroad. They put together their first TV commercials, and plan on exporting to more countries. Mr. Chua said that they are looking at exporting to the Middle East, where there are more than two million Filipinos.

Biofuel plan faces fresh backlash from US agriculture

NEW YORK — US agricultural trade groups on Friday told the Trump administration a proposed biofuel reform package falls short of expectations, four sources familiar with discussions said, complicating plans the administration had for presenting the proposal to President Donald Trump.

Trump was expected to meet with Environmental Protection Agency and Department of Agriculture officials on Friday afternoon to discuss the proposal meant to assuage farmers angry about biofuel blending exemptions given to oil refineries, a separate source said. Trump has found himself in a political bind as he looks to appease two of his most prized constituencies — Big Oil and Big Corn — to again propel him into the presidency next year.

The proposed plan would include an increase to biofuels requirements for 2020 of 1 billion gallons (3.8 billion liters), sources said.

The plan already faced backlash during a conference call the USDA held early Friday with biofuels advocates to detail plans, sources said. The agricultural industry wants the administration to force larger refineries to make up for the exempted gallons through a process called “reallocation,” but it has not committed to that yet, the sources said.

“Plants are closing now. Farmers are going bankrupt now. The biofuel industry made it clear that restoring the exempted gallons by 2020 is the only way to stop the bleeding,” said a biofuel source familiar with the call. “Anything short of that is going to face united opposition, which means the president won’t want to show his face in Iowa.”

The meeting on Friday afternoon was initially expected on Thursday evening but was pushed back, a source said. The White House declined to comment for this story.

Trump has promised to deliver a “giant package” to US farmers related to ethanol, in response to ire from US farmers and biofuels advocates over 31 exemptions regulators have given to oil refineries to free them of requirements to blend biofuels.

Biofuels advocates, including Republican senators Chuck Grassley and Joni Ernst from Iowa, weighed in on the issue on Twitter on Friday.

“Know this @EPA and @USDA: the only good deal for Iowa farmers is one that upholds the intent of the RFS,” Ernst said.

The Renewable Fuel Standard (RFS) requires refineries to blend increasing volumes of biofuels into their fuel each year. Small facilities under financial strain can be exempted, and Trump authorized the EPA to grant 31 waivers to small refineries in August, far more than the Obama administration had typically granted.

The draft plan under consideration would include a previously discussed increase of 500 million gallons for conventional biofuels, largely corn-based ethanol, as well as an additional 500 million gallons for advanced biofuels like biodiesel for 2020, sources said. It would also include an addition to the biodiesel mandate for 2021 of 250 million gallons.

That increase would help address “excess waivers,” which have also harmed biodiesel and soy farmers, according to a document seen by Reuters that details the proposal.

An EPA spokesperson declined to confirm or comment on the plan on Thursday but said the agency will continue to consult on the best path forward for the program.

The latest proposal has already drawn criticism from the oil industry.

Additionally, officials at companies including Ergon Inc, Sinclair Oil Corp and San Joaquin Refining Co Inc wrote in a letter to Trump on Friday that small refineries that demonstrate economic hardship created by compliance costs are entitled to an exemption.

West Virginia legislature leaders sent a joint letter on Friday to the White House, saying, “We fear the Administration may lose sight of the importance of protecting small refineries which are critical to the US energy infrastructure and the manufacturing jobs they provide throughout the country.”

Since the waivers were granted, farmers and biofuel producers have voiced swift opposition. A coalition of labor unions that supports the biofuels industry sent a letter on Friday to EPA Administrator Andrew Wheeler, urging the administration to stop issuing excess waivers. — Reuters

US probe finds possible lapses in Deutsche Bank controls

LONDON/NEW YORK — US congressional investigators have identified possible failures in Deutsche Bank AG’s money laundering controls in its dealings with Russian oligarchs, after the lender handed over a trove of transaction records, e-mails and other documents, three people familiar with the matter said.

The congressional inquiry found instances where Deutsche Bank staff in the US and elsewhere flagged concerns about new Russian clients and transactions involving existing ones, but were ignored by managers, two of the people said.

Lawmakers are also examining whether Deutsche Bank facilitated the funneling of illegal funds into the US as a correspondent bank, where it processes transactions for others, one of the sources said.

The congressional probe, whose initial findings have not been previously reported, is at an early stage, and it is not yet clear whether it will lead to any action against the bank, the three sources said.

A Deutsche Bank spokesman, Troy Gravitt, said the bank cannot comment on the work of the congressional committees but remains committed to cooperating with authorized investigations.

Addressing past deficiencies in the bank’s controls, the spokesman said: “We have worked to address them, taken disciplinary measures with regards to certain individuals and reviewed our client onboarding and monitoring processes.”

The House of Representatives Financial Services Committee declined to comment.

The Democrat-controlled House began examining possible money laundering in US property deals involving President Donald Trump, a Republican, earlier this year. The lawmakers are also looking into whether Trump’s dealings left him subject to the influence of foreign individuals or governments.

The White House and a Trump Organization spokeswoman, Amanda Miller, did not respond to requests for comment.

Deutsche Bank has been drawn into the inquiry as Mr. Trump’s biggest lender and submitted documents to investigators in response to a subpoena.

The stakes are high for the German lender, which is trying to engineer a turnaround under Chief Executive Officer Christian Sewing after a multi-year bet on building a global investment banking business unraveled.

Graham Barrow, a financial crime consultant, said that while the bank had since sought to reform, it had taken too many risks in countries such as Russia.

“The bank decided to go for becoming a global investment bank,” Mr. Barrow said. “They were compromised.”

Deutsche Bank declined to comment on Mr. Barrow’s view.

In 2017, Deutsche Bank agreed to pay regulators in the US and Britain $630 million in fines for organizing $10 billion in sham trades that could have been used to launder money out of Russia. Two of the sources said that the preliminary findings of the congressional investigators may have some overlap with that case but also include lapses unrelated to that matter.

New evidence thrown up by the congressional probe could feed into further investigations by other authorities, regulatory experts said.

If evidence of wrongdoing is found, it could also harm the bank’s efforts to strengthen its relationships with US regulators and deter investors concerned about the possibility of future regulatory sanctions. Deutsche Bank’s shares hit an all-time low last month.

CONGRESSIONAL SUBPOENA
Earlier this year, the House Financial Services Committee served a 12-page subpoena on Deutsche Bank. Reuters has seen a version with portions blacked out.

Lawmakers requested documents that identify “any financial relationship, transactions, or ties” between Mr. Trump, his family members and his companies and “any foreign individual, entity, or government,” according to the subpoena.

It also asks for hundreds of documents relating to other bank clients, including Russian oligarchs, the three sources said. These documents include account applications, know-your-client money laundering checks, internal assessments of “suspicious activity,” as well as information about loans and mortgages, according to the subpoena.

Although Mr. Trump has challenged the release of his banking records in court, in April Deutsche started handing over information that is not directly related to the president and is continuing to do so, one of the people said.

That includes material prepared by bank staff for filing so-called suspicious activity reports to the US Treasury department and documents about Russian deals circulated among the bank’s management and reputational risk committee, one person said.

The bank has also assembled a large amount of the subpoenaed Trump material, pending the court’s decision on whether it should be released, the three people said.

The House Financial Services Committee will continue its investigation of Deutsche Bank’s money laundering processes regardless of whether the court rules the lender should hand over the Trump documents to investigators, three sources familiar with the investigation said. — Reuters

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