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Stuck-at-home rich boost trading at Asia’s private banks

ASIA’S SUPER RICH suddenly have lots of time on their hands.

The coronavirus has forced many of them to work from home, cancel travel and avoid the golf course. That’s left them more time to trade stocks amid the turmoil, boosting revenue for Citigroup, Inc. and other banks in the region.

“Clients are getting restless,” said Jyrki Rauhio, South Asia head of private banking for Citigroup. “They’re traveling less and have more time to look at the markets and review their portfolios.”

New York-based Citigroup joins firms including UBS Group AG and JPMorgan Chase & Co. that have seen a jump in trading this year as the virus roils markets. The trading surge has helped dull the pain of a health crisis that has otherwise frozen parts of their Asian banking businesses, from mergers to initial public offerings, and grounded investment bankers across globe.

JPMorgan’s brokerage activity at its Asia private bank increased more than 30% in February from a year earlier as wealthy customers traded more, said Kam Shing Kwang, regional chief executive officer of the unit.

“Client activity has been good so far,” Kwang said in an interview. “The trend depends on how long the virus outbreak is going to last.”

The coronavirus epidemic has led to wild swings in equities around the world, boosting activity at stock exchanges and bringing in more revenue for bank trading desks. Some 49.1 billion MSCI Asia Pacific Index shares changed hands on Feb. 26, the highest level in history, according to data compiled by Bloomberg.

In Hong Kong, trading exceeded HK$100 billion ($12.9 billion) on 24 of the 28 days after the Chinese New Year holiday, according to data from the Hong Kong exchange. Trading on Feb. 28 alone was the highest in a year. Currency and rates trading have also increased during the virus scare.

“The combination of less travel and increased market volatility means that clients are extremely active,” said Michael Blake, Asia CEO of Swiss private bank Union Bancaire Privée. “We have seen consistently high transaction volumes since the start of the year.”

With the fastest expansion of millionaires in the world, Asia is the region where wealth managers from UBS, Credit Suisse Group AG and others are seeking to grow. They’re racing against time to change how they interact with wealthy customers amid the outbreak that has claimed more than 3,300 lives.

While the virus has provided a short-term boost to trading, the travel restrictions have made it harder to win new private bank clients, especially in China. Some banks are signing up new customers digitally, though most new accounts have to be opened in person.

The risk for these banks is that a prolonged crisis will curb that client growth, just as they are trying to expand in China’s massive wealth market. The world’s second-largest economy is expected to see the biggest annual growth among the world’s private banking markets through 2023, Boston Consulting Group, Inc. said in a report last year.

One Hong Kong-based private banker, focused on the offshore Chinese business, said he’s mostly talking to prospective customers in his city because his firm has curbed travel and there are limited ways to reach mainland Chinese investors.

Another banker, whose focus is on Hong Kong clients, said it’s difficult to get new business from clients because they are unwilling to meet even if they’re in town. While his business in the first quarter is holding up, the outlook is dim if the outbreak persists, he said. Both bankers asked not to be identified speaking on client matters.

The crisis has opened up opportunities with existing clients as investor caution grows, bankers say. Blake at UBP said structured product volume has doubled from the same period a year ago as clients reduce risk and look for some downside protection. Citigroup has noticed a similar trend, with some clients holding more than 20% in cash, though some of that’s starting to be deployed after the global stock pull back.

JPMorgan and UBS are among banks that have allowed relationship managers to use WeChat, a popular messaging app in China, to communicate with clients on the mainland and maintain engagement. The Swiss firm, Asia’s biggest wealth manager, said it’s been investing in technology and providing digital communication resources for its staff and clients.

“Since our clients are not traveling, they are actually spending more time discussing their investment portfolios with us over phone or video conference,” said Amy Lo, co-head of wealth management for Asia Pacific at UBS. — Bloomberg

Animal mascots at Stella McCartney’s show

PARIS — British designer Stella McCartney presented on Monday her snug and elegant looks for next winter with a playful twist, as animal mascots including a big white bunny joined models on the runway at the Paris fashion show.

People dressed in fox, crocodile, and cow costumes stole the show during the joyous finale, eliciting smiles from A-list guests including Vogue editor-in-chief Anna Wintour and actress Shailene Woodley.

McCartney has long been known for her environmentally friendly approach and was one of the first major designers to shun animal-related products — a cause many others have since taken up, though rarely in such a tongue-in-cheek manner.

“There has never been a time when we have had more hope in ending fashion’s use of fur and leather — a practice that is cruel to the animals and harmful to the planet,” McCartney said in the show notes.

A pioneer in using recycled fabrics, the designer uses vegan leather in her latest collection, including a perforated raincoat and long, amber-brown jackets.

Models showcased fluffy outerwear and comfortable dresses, with many featuring lumberjack and checked prints. Some coats were even shaggier, and appeared to be clad in mini-dreadlocks.

High-collar cloaks, utilitarian tunics and slouchy suits also made an appearance while McCartney’s tailoring mixed feminine and masculine codes in an androgynous and minimalist style.

In some of the most ready-to-party looks, McCartney offered silky and fluid gowns embellished with luxurious metallic beaded designs, presented in the corridors of the sumptuous Opera Garnier.

Gold or silver animal jewelry including necklaces and brooches added an eccentric touch to some outfits.

The Stella McCartney brand has joined forces with French luxury goods group LVMH, after a long-running partnership with the conglomerate’s rival Kering. — Reuters

Court affirms San Miguel Foods’ P960M canceled tax assessment

THE Court of Tax Appeals (CTA) affirmed the cancellation of the P959.9 million tax assessment against San Miguel Foods, Inc. for 2010.

In a six-page resolution on March 2, the court’s third division denied for lack of merit the motion for reconsideration of the Bureau of Internal Revenue (BIR).

The court junked the claim of the BIR that the “due date” requirement for the validity of an assessment is misplaced.

The BIR argued that in Section 228 of the Tax Code, the three mandatory requirements for an assessment to be valid, namely: the taxpayer are to be informed of the audit, the notice must be in writing, and it must contain the facts.

The court, on the other hand, cited several jurisprudence stating that an assessment is also a “demand for payment within prescribed period” and not just a computation of tax liabilities.

“Indicating a fixed and definite period within which a taxpayer must pay the tax deficiencies is necessary to the validity of an assessment,” the court said.

“In the absence thereof, it negates the CIR’s demand for payment making the FAN defective and therefore void. As a rule, a void assessment bears no valid fruit,” it added.

The court in October last year cancelled the assessment of the BIR against San Miguel Foods because of a lack of due date in the demand letter to the company.

It also denied the allegation of the bureau that there was a misapplication of two jurisprudence in the case, saying in one of the cases that a valid formal assessment should also include a demand for payment within a prescribed period aside from computation of tax liabilities..

“Having addressed the aforementioned arguments of respondent, the Court finds no cogent reason to reverse or modify the assailed Decision,” the court said.

The decision was penned by Associate Justice Erlinda P. Uy and concurred in by Associate Justices Ma. Belen M. Ringpis-Liban and Maria Rowena Modesto-San Pedro. — Vann Marlo Villegas

Maxus PHL enters pickup segment via T60

Text and photos by Kap Maceda Aguila

FOLLOWING its release of people movers along with the commencement of business here nine months ago, Maxus Philippines now throws its hat into the highly competitive pickup arena. A total of three variants of the Maxus T60 join the local portfolio of the China-headquartered brand which touts a deep British history.

The company reported in a release that T60 is the “the longest and widest” in the mid-size pickup class, “allowing varied requirements of cargo and passenger transport.” Under the hood rumbles a 2.8-liter diesel engine with a variable-geometry turbocharger and Drive Mode Select, mated to either a six-speed manual or six-speed automatic transmission. The system generates a peak of 150ps at 3,400rpm and maximum torque of 360Nm at 1,600 to 2,800rpm.

Maxus lists the standard features found on the T60: an infotainment system with Apple CarPlay and Mirrorlink, rear camera and sensors, rain-sensing wipers, cruise control, and rear air-conditioning vents. The pickup boasts a wading depth of 800mm. The top variant 4×4 Elite additionally boasts LED headlamps and daytime running lamps, electronic stabilization, power driver-seat adjustment, push-start ignition, a larger 10-inch monitor, and automatic air-conditioning.

Meanwhile, in a speech, Automotive Central Enterprise, Inc. President Felipe Estrella pointed to a whole suite of safety features in the T60. “Thanks to the European-style double layer welding technology, tire pressure monitoring system, the six air bags, and a host of other safety features, the T60 has scored the highest five-star rating in the Australian NCAP safety test,” he said. “This is a true testament to the pickup’s adherence to global safety standards.” The vehicle also has Isofix seats and an immobilizer.

In an exclusive interview with Velocity, AC Industrials CEO Arthur Tan said it makes sense to bring in the T60. “In the Philippine market, the pickup and mini SUV are the fastest-growing segments. We (also) already have a strategy that we’re going to support the entire spectrum of motoring needs in the country… including passenger cars, light commercial and commercial vehicles.”

The automobile brands within the purview of the Ayala conglomerate are “looking at all the different white spaces available, looking at those actually growing independent of the current economic situation, and we’ll make sure that we have a pipeline that will fit inside those segments. And the T60 is one of those that perfectly fit both in terms of need, in terms of growth, in terms of competitive pricing, and feature requirement,” he added.

Perhaps cognizant of the battle it has to wage to secure its place in a market full of more established competition, Maxus Philippines is upping the ante by backing up the T60 with a five-year/100,000-km. warranty. Even its preventive maintenance schedule (PMS) promises more convenience and savings to customers. Following the first 5,000-km servicing, customers only need to bring in the T60 once a year or 15,000 kms — whichever comes first. The company also offers 24/7 emergency roadside assistance, pickup and delivery service for customers, and on-site servicing for corporate fleet accounts.

“Filipinos are very, very discriminating,” added Mr. Tan. “We’re very knowledgeable about cars, and we understand the plus and minus of features under the hood, of convenience, and of safety. On all those factors, we saw that the T60 ticks the boxes.”

At the launch event, guests were able to test-drive and experience the T60 models through a gauntlet of off-road and on-road challenges. But surely tipping the scales in its favor is the pricing of the new model. The Maxus T60 4×2 Pro MT, 4×2 Pro AT, and 4×4 Elite AT are offered at special introductory prices of P948,000, P1,028,000, and P1,278,000, respectively. Maxus Philippines General Manager Reginald See described the T60 as “packed with features at an entry level price.”

Still, it’s not just about the numbers, averred Mr. Tan. “It’s always an indication, but it’s more than that. Having the Ayala brand behind it helps build a certain level of trust among the public. It’s a new brand, although it has a very long British heritage, but Ayala has been here more than 185 years, and we’re going to be here for the next 185 years.”

After-sales support is also an important pillar of what Maxus is trying to build here. “We’re putting in a pipeline of dealerships, and we’re making sure we vet those dealers very well; that they will give the customer experience that we like to impart. We’re managing the distribution part of it and at the same time we’re setting up our own dealerships in order to be a reference for everybody else.”

All T60 units come from Shanghai, China, which begs the question of whether or not there will be a risk of supply disruption in the face of the COVID-19 outbreak.

“The issue of disruption permeates across all brands,” Mr. Tan said. “There’s no single brand globally that would not be affected. So there’s no reason to think that Maxus will be singled out differently from what is happening across the board. Everybody will be in the same playing field.”

The Maxus brand is owned by SAIC Motor — ranked among the top 10 automakers globally — which sold more than seven million units in 2018. The Ayala executive concluded with a smile: “Now, the advantage that we have is that we’re working directly with the clear biggest manufacturer in China. So in terms of pecking order, if there was a supply chain issue, the big one wins, right?”

For more information, visit www.maxus.com.ph or like and follow the Maxus Philippines Facebook page and Instagram account (@maxusph). Maxus showrooms are located in Mandaluyong, Quezon City, Taguig South, Cebu, and Iloilo.

US says it will ban pig shipments if fatal hog virus is detected

CHICAGO — The US Department of Agriculture said on Friday it will prohibit shipments of all pigs for at least three days if the nation ever finds a case of a fatal hog disease that has ravaged China’s herd.

The federal government is preparing to contain and eradicate African swine fever if it spreads to the United States to avoid the type of devastation seen in China, where the disease has reduced the herd by more than 40% and pushed pork prices to record highs. Since the China outbreak, African swine fever has broken out in 10 countries in Asia.

Containing the virus is important for US farmers and meat processors like Tyson Foods Inc. and WH Group Ltd’s Smithfield Foods Inc. [SFII.UL] because an outbreak would shut the $7 billion export market for American pork.

The United States Department of Agriculture would stop the transportation of pigs if the United States detects a case in an effort to stop the disease from spreading, the agency said in a statement. The halt would prevent farmers from delivering pigs to slaughterhouses where they are turned into bacon and pork chops.

With no vaccine or cure available for African swine fever, experts recommend that infected pigs and others housed in the same barn be culled. The USDA said the best options for disposing of dead pigs would be to bury them on farms or turn them into compost.

“USDA plans to pay for virus elimination at a uniform, flat rate, based on the size of affected premises,” the agency said. — Reuters

MPIC shares climb as earnings results outweigh uncertainties

By Jobo E. Hernandez
Researcher

INVESTORS continued to take positions on Metro Pacific Investments Corp. (MPIC) stock last week following the release of the company’s annual earnings results late last month.

Data from the Philippine Stock Exchange showed a total of P1.26 billion worth of 364.40 million MPIC shares exchanged hands at the trading floor from March 2 to 6.

Shares in the Pangilinan-led holding company closed on Friday at P3.62, up by 17.9% from P3.07 a week ago. Year to date, the stock’s price has risen by 7.7%.

“The rally can be attributed to its sound 2019 financial results driven by its power, toll operations, and hospital segment. The attractive valuations also made [MPIC] a good candidate for bargain hunting this week. In fact, the company itself has already stepped in the market through its share buy-back program in light of the view that its share is already too undervalued,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in an e-mail.

“With the NAIA (Ninoy Aquino International Airport) rehabilitation deal, there are still uncertainties stemming from some disagreements between the consortium and the government. Nonetheless, these uncertainties have been placed on the sidelines for the meantime in favor of the positive factors aforementioned that drove [MPIC’s] share price up,” he added.

Mr. Tantiangco was referring to the news regarding the government’s reservations over portions of the concession agreement drafted by the “super consortium” that is proposing to rehabilitate NAIA, such as the use of a bus rapid transit system to transport passengers within the airport complex and the job security of workers of the Manila International Airport Authority, the government agency responsible for the management of NAIA.

To recall, the National Economic and Development Authority Board approved in November last year the unsolicited P102-billion proposal from a consortium to rehabilitate NAIA. This consortium is comprised of MPIC, Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; and JG Summit Holdings, Inc.

Once the concerns are settled and negotiations are concluded, the rehabilitation project will be subject to a Swiss challenge, wherein third-party companies are invited to submit counterproposals, with the original proponent being given the right to match.

The rehabilitation of the NAIA, whose main terminal opened in 1981, is expected to increase its capacity to 47 million passengers a year in the first two years and further expand this to 65 million passengers after four years.

In a separate e-mail, Mercantile Securities, Inc. Analyst Jeff Radley C. See noted MPIC “bottomed out” following the company’s announcement of the P5-billion buyback program. “Aside from that, they partnered with the Dusit International group to push their hospitality arm,” he said.

MPIC announced last month that its board of directors approved doing a three-month share buyback program of up to P5 billion until May 26 in order to “enhance and improve shareholder value and to manifest confidence in the company’s value and prospects through the repurchase of its common shares.”

Moreover, MPIC signed a P1.6-billion investment deal with Dusit last month for the joint development and management of hotels and condominiums in the Philippines. The partnership will commence this year with the development of two hotels and three condominiums in MPIC’s properties in Batangas, as well as the upgrade of Dusit’s existing properties in the country.

MPIC reported 69% growth in its attributable net income to P23.9 billion in 2019 from P14.13 billion in 2018. It also posted a core net income of P15.6 billion in 2019, up 4% from a year ago.

The holding company posted gains in its businesses in power (which make up 55% of its net operating income last year, or P11.6 billion), tollroads (25%, P5.2 billion), water (17%, P3.6 billion), and hospitals (4%, P867 million). On the other hand, other businesses such as rail and logistics posted a combined net loss of P352 million.

“[N]et income could decline for 2020 as it normalizes after its 69% spike in 2019 brought by nonrecurring earnings. Nonetheless, core net income could still climb higher marginally, still driven primarily by its power and toll operations segment,” Philstocks’ Mr. Tantiangco said, adding that this could change if the effect of the coronavirus disease outbreak worsens as it would adversely affect the company’s operations.

Mr. Tantiangco placed the MPIC stock’s support and resistance levels at P2.90-P3.00 and P3.80-P3.90, respectively.

For Mercantile Securities’ Mr. See: “[MPIC] support levels are P3.40 and P3.00 while resistance levels are P3.80 and P4.20.”

MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group.

Yields on government debt drop on Fed emergency cut

By Mark T. Amoguis
Assistant Research Head

YIELDS ON government securities (GS) declined further last week after the US Federal Reserve implemented an emergency half-percentage-point cut to its key rates to counter the impact of the spread of the coronavirus disease 2019 (COVID-19).

Bond yields, which move opposite to prices, decreased by a week-on-week average of 12.3 basis points (bps), according to the PHP Bloomberg Valuation Service Reference Rates as of March 6 published on the Philippine Dealing System’s website.

“Local yields declined from the impact of the unexpected 50-bp cut of the US Federal Reserve. This decline was also amplified by market expectations of more policy easing from the Bangko Sentral ng Pilipinas (BSP) and other various central banks abroad,” a bond trader said in an e-mail interview.

The trader added that the weaker-than-expected February inflation also “provided strong downward pressure” on GS yields.”

Meanwhile, another bond trader said this decline in yields was still due to COVID-19 and its effect on the global growth outlook.

“[Bond] prices were pretty much steady already after the CPI (consumer price index) result as market took it as an opportunity to take profit,” the second trader said in a mobile phone message.

Last Tuesday, the Fed trimmed its key rates by 50 bps — largest cut in more than a decade — to a target range of one percent to 1.25% in an unscheduled meeting to shield the world’s largest economy from the impact of the COVID-19.

This action was ahead of the scheduled Federal Open Market Committee meeting from March 17 to 18.

BSP Governor Benjamin E. Diokno said last week the Monetary Board (MB) will not have an off-cycle meeting to cut interest rates.

Mr. Diokno also said the recent Fed cut and the February inflation data, among others, will serve as inputs for the MB policy meeting on March 19.

He said earlier last week another 25-bp cut is on the table for this year, adding that they will reassess the impact of the COVID-19 on the economy during the MB meeting.

Last month, the BSP chief said he’s not ruling out a cut worth 50 bps or 75 bps this year.

Current policy rates range from 3.25% to 4.25%, with the key rate at 3.75%.

Meanwhile, headline inflation eased to 2.6% in February from 2.9% in January and 3.8% in February last year amid softer prices of food and non-alcoholic beverages and nonfood items, the Philippine Statistics Authority reported on Thursday.

The February inflation print missed the three percent median estimate in a BusinessWorld poll, but was within the 2.4%-3.2% forecast range given by the central bank.

For the year, inflation settled at 2.8%, within the central bank’s 2-4% target range and below the revised three percent forecast for the full-year 2020.

There now are more than 100,000 confirmed cases of COVID-19 around the world with close to 3,300 reported deaths.

The Philippines now has six confirmed COVID-19 cases, the Health department announced over the weekend.

Yields on benchmark tenors declined across-the-board last Friday from their week-ago levels with the three-month, six-month, and one-year Treasury bills decreasing by 1.8 bps, 4 bps, and 12.7 bps, respectively, to yield 3.058%, 3.367%, and 3.719%.

The belly of the yield curve likewise fell as the two-, three-, four-, five-, and seven-year Treasury bonds dropped 13.2 bps, 13.2 bps, 14.2 bps, 15.9 bps, and 16.5 bps, respectively, to end at 3.731%, 3.824%, 3.895%, 3.958%, and 4.084%.

At the long end, yields on the 10-, 20-, and 25-year papers went down by 8.8 bps, 13.2 bps, and 21.4 bps, respectively, to 4.221%, 4.631%, and 4.65%.

Traders see GS yields further trending lower this week as markets expect central banks abroad to slash their interest rates.

“Local yields might continue to head south amid possible resurgence of safe-haven demand due to expectations of weaker economic growth from Japan and the euro zone,” the first bond trader said.

“Furthermore, increasing market views of further monetary and fiscal policy easing abroad are also expected to drive down bond yields,” the trader added.

Giambattista Valli celebrates Paris attitude

PARIS — Giambattista Valli paid homage to the innate style and apparently effortless chic of the emblematic Parisian woman at his fashion show in the French capital, as the Italian designer celebrated his 15 years in the business.

Valli, who lives in the city, said he was inspired by every day looks around him. He also turned to references such as the black and white pictures of 20th century photographer Henri Cartier-Bresson and the late French actress known as Arletty.

The collection included little black dresses, black and white suits, pink chiffon nightgown-style dresses decorated with flowers and ostrich feathers — staples of “la Parisienne’s” wardrobe.

“I wanted to share the vision of the girl that I’ve seen these last 20 years that I’ve been living in Paris,” Valli told Reuters after the show. “This boyish attitude, independent, unique and at the same time very seductive, very free.”

“La Parisienne can go out without make-up, without tights, wearing her boyfriend’s loafers — she’s very free,” Valli added saying every look in the show was meant to embody different Parisian personalities.

Italian model Bianca Brandolini, American designer Rick Owens and François-Henri Pinault, head of the Kering conglomerate as well as the Artemis group that owns the Valli brand, were among the guests at the Paris decorative arts museum.

French model Ines de la Fressange, who long walked the runway for Chanel and is known as a reference for French style, said slouchy evening trousers, embroidered with flowers motifs and sequins, were among her favorite looks.

“It’s elegant, there’s a link to the past that I really like,” she said of the show.

Born in Rome 53 years ago, Giambattista Valli worked for Ungaro from 1998 to 2004, then launched his own label in 2005.

Last autumn, he became one of the latest designers to create a collection in collaboration with high street chain H&M, which featured takes on the puffy, tulle dresses that have made him a red carpet hit. — Reuters

Electric dreams do come true

The future is electric.

There is no doubt that, as far as the future of mobility is concerned, electrification is where automotive companies — and auto buyers — are heading. You wouldn’t know it, though, if we go back to when Toyota first launched its hybrid electric Prius in 1997. Despite the forward-looking goals of Toyota to help reduce dependency on fossil fuels and reduce greenhouse gases, many were skeptical. Conventional wisdom was that hybrid electric vehicles (HEV) were not fun to drive, were funky looking, and just plain boring.

Twelve million Toyota HEVs later and it seems that every automaker has embraced hybrid electric technology as the gateway to electrification. Considering that the primary components of HEV — the battery, motor, and inverter — are common to full battery electric vehicles, it just makes sense.

In my mind, there are two factors that accelerated the rush to electrified vehicles. One was the decision by the Chinese government to bet (and bet big) on electric cars as the technology of choice for the country’s rapidly growing automotive industry. While the USA and Europe began their evolution to vehicle electrification in the last century, China started its journey only in 2001.

Boosted by government incentives, however, development of and demand for electric vehicles grew rapidly. By 2015, total sales of new energy vehicles or NEVs as alternative fuel vehicles are called in China, grew from zero to 497,000 units, more than anywhere in the world. In 2017, the NEV sales reached 1.621 million vehicles. This represents 50.4% of global NEV sales, far ahead of the USA that, in second place, accounts for only 17.3% of sales.

When a market that at its peak reached over 28 million vehicles decides that it will go electric, the universe of automakers pays attention. There was no sales growth trajectory anywhere that did not include a slice of the China market. So, any forecast by any automobile maker had to include sales of electric vehicles. In the last few years, this was compounded even more by the announcement of strict Corporate Average Fuel Efficiency (CAFE) regulations that would make it almost impossible to comply without a robust electrification plan. By sheer numbers, any automotive company who dreams of even a one-percent share of the Chinese auto market needs electric vehicles of some sort in its lineup.

The other factor in the rise in popularity of electric vehicles was Tesla. The company found the magic formula that transformed battery electric vehicles (BEVs) from boring to sexy in design, performance, and appeal.

Even if, to this day, Tesla struggles to meet production targets, profit goals, and promised launch dates, the market is enthralled with the brand and its models. They continue to queue for a chance to own their cars and their shares. Perplexing but real. Since the launch of the Tesla Roadster back in 2008, electric vehicles have become infinitely more attractive — albeit with the same quiet engine that used to turn car owners off in a major way.

Suddenly, vehicle electrification is the order of the day. It has become a crusade. Automakers the world over have decided to charge down the path towards sustainable mobility for all.

The question, though, is why the sudden surge in interest in electric cars or EVs? They aren’t any more fun to drive as they could have been when the Prius first came onto the market. There was a resistance then that is seemingly gone now. Any full-blooded car-guy or gal will swear that petrol and diesel-run cars still provide the ultimate rush.

Next, EVs are more expensive to produce and, therefore, sticker prices are higher than combustion-engine automobiles. This is mainly due to the cost of batteries that, by varying measures, account for 20% to 30% of the cost of an EV. New technologies in battery production are needed to drive the cost down.

Finally, EV usership brings with it “range anxiety” because of the lack of charging stations and the length of time needed to top up the car battery. Until a robust network is built by government or the private sector, car buyers will remain wary about being stuck on the highway or in traffic because their battery ran out on them.

Yet, the clamor and lust for EVs continue to rise. Discounting the drawbacks I just enumerated above, EVs are touted as the essential lifeline to a greener tomorrow. Government lawmakers, policy institutions, and NGOs have all lined up to call for the electrification of vehicles. Well and good. This is a very welcome movement, indeed. I hope that more and more sign up.

Clearly, the call to electrification has its sights set on the need to reduce harmful emissions that will, in turn, help realize commitments to the Conference of the Parties (COP) on climate change. The need for drastic measures to mitigate the deterioration of the environment and our climate is real. We cannot procrastinate any longer than we already have.

There is one glaring flaw in this move towards electrification, though. While the call to cut tailpipe or wheel-well emissions to zero has been incessant, there has been no major undertaking to reform or transform oil-well emissions. This refers to migrating electricity generation away from dirty, coal-fired technology to more sustainable alternatives such as hydro, solar, or nuclear.

Unless the entire carbon footprint is managed from oil well to wheel well, then we might, in the end, just be increasing our total harmful emissions and, thus, defeat the very reason we are moving towards electrified vehicles.

The need for sustainable mobility is a clear and present challenge. We should not kick the can down the road again and again. Every effort taken today is something less that future generations have to worry about. While the shift to full-electric vehicles, for example, should be pushed, we should also embrace HEVs that are solutions for the here and now. One Prius saves one ton of CO2 emissions a year. Why not make that difference today even while waiting for the zero-emission EVs to become more affordable and the proper recharging infrastructure put in place?

Yes, we can make our electric dreams come true today — one step at a time.

 

The author is an automotive executive with extensive experience in the field of marketing and sales. Mr. Socco was significantly involved in the start-up of business operations for Toyota in the Philippines — a brand with which he has some 36 years of involvement. He also has a broad executive experience in distributor operations as well as regional and global headquarter responsibilities. He is currently Chairman of GT Capital Auto Dealership Holdings, Inc.

Better farming practices needed to maximize hybrid seed — Chen Yi

CHEN YI Agventures calls said better farming practices are needed to maximize the impact of high-yielding hybrid seed, the use of which is poised to raise the rice industry’s competitivenes under a government-funded program.

In an interview, Chen Yi co-founder Patrick Francois Renucci said: “There is no positive impact of hybrid seed because the yield is the same. Imagine if farmers were equipped with the latest farming machinery, and practice good farming techniques, there’s a huge potential for farming in the country,” Mr. Renucci added.

His observation has been that farmers who use hybrid seed have the same yields as those using inbred seeds.

“Prices of palay (unmilled rice) can be lowered further by changing the bad farming habits that Filipino farmers still practice,” he said, adding that they and their farms have to be ready for the new seed.

Providing high-yield seed is one of the government’s strategies for boosting yields. The Rice Competitiveness Enhancement Fund (RCEF), funded from rice import tariffs, hopes to deploy its P10 billion a year funding by supporting mechanization, credit, know-how, and fertilizer, as well as seed.

Chen Yi President Rachel Renucci-Tan said the company assists farmers in improving productivity and incomes via the Renucci Partnership Program and Renucci Palay Procurement Program, which when combined make up a partner grower arrangement under which Chen Yi buys their harvest.

Chen Yi has 700 farmers in the Renucci Partnership program in Alang Alang, Leyte.

The partnership program provides low-interest loans, fertilizer, pesticides, inbred seed, and planting and harvesting equipment.

Ms. Renucci-Tan said: “We hope that others follow our program so that the need to import rice declines.”

Chen Yi Agventures operates its own fully-automated Rice Processing Center (RPC) using Japanese technology. It claims the center is the most advanced in Southeast Asia.

The center stores palay in temperature-controlled wet bins before and after drying to maintain reshness. It is then stored in temperature-controlled silos.

Chen Yi Agventures invested P1.7 billion in the rice processing center.

The company’s Dalisay Rice won the 3rd place at the World Rice Conference competition last year. — Revin Mikhael D. Ochave

UK plans levy on banks, other financial firms to tackle money laundering

LONDON — Britain is expected to announce this week a new levy on banks and other firms regulated for anti-money laundering to raise up to 100 million pounds ($130 million) to tackle dirty money, the government said on Saturday.

London has long attracted corrupt foreign money, especially from Russia, Nigeria, Pakistan, former Soviet states and Asia, and the police estimate that around 100 billion pounds of dirty money is moved through or into Britain each year.

In his first budget on Wednesday, finance minister Rishi Sunak is expected to unveil plans for an Economic Crime Levy to generate cash for new technology for law enforcement and to hire more financial investigators.

The levy is likely to come into force in 2022/23 and the Treasury will consult in the Spring about which firms will be asked to contribute.

“Criminals will have nowhere left to hide their illicit earnings,” Mr. Sunak said in a statement. “We’re going to put more financial investigators and better technology on the frontline to fight against money laundering.”

Last year the government and business leaders agreed an Economic Crime Plan to try to better tackle dirty money with more cash for police to tackle fraudsters and money launderers, and improved information sharing. — Reuters

Iloilo town ventures into silk production to meet demand of traditional weavers

LOCAL SILK yarn production is not enough to meet the needs of weavers around the country, especially with the renewed appreciation for indigenous designs. “Right now, the silk yarn that we are producing cannot meet the demand of the weavers, that is why we are encouraging more farmers to venture in this production,” Philippine Fiber Industry Development Authority (PhilFIDA)-Western Visayas Regional Director Evelyn B. Cagasan said in a recent interview as they announced a pioneering project in Lambunao.

Members of the Champion Farmers Program (CFP) of Lambunao are the first in Iloilo province to have been trained and assisted for the establishment of mulberry production sites for sericulture or silk farming.

The farmers were supported by the Japanese Organization for Industrial, Spiritual, Cultural Advancement (OISCA), a non-government group, and PhilFIDA.

“We expressed our interest for the project so OISCA tapped us to be one of the beneficiaries,” CFP Executive Director Ariel Lastica said.

The project was formalized through a memorandum of agreement in June 2019 involving the Lambunao local government, CFP, OISCA and PhilFIDA.

Five CFP members have since gone to Bago City in Negros Occidental, where OISCA’s filature plant is located, to undergo an orientation on sericulture as well as training on silk cocoon production.

They have already started trial production with thousands of silkworms, and have so far harvested seven kilograms of Class A cocoons.

“The production of cocoons is dependent on the mulberry leaves. Without the mulberry, we cannot produce high quality cocoons,” Mr. Lastica said.

Mulberry leaves are fed to the silkworms whose cocoons are made of silk.

Ms. Cagasan said one of the factors for choosing Lambunao was the soil quality, which is suitable for growing mulberry.

“We provided planting materials for the mulberry and technical assistance to increase their production for the rearing of silkworms in collaboration with OISCA,” she said.

The biggest production center for mulberry and silk cocoon production in Western Visayas is in Bago City and, together with Ibajay town in Aklan, the region’s total silk yarn production is about 89 kilograms annually.

Ms. Cagasan said the demand of local weavers is at least 150 kilograms per year.

“The filature plant in Negros Occidental reels the harvested cocoon produced by the farmers into silk yarn. We then supply it to local weavers in Manila and Mindanao,” she said.

The PhilFIDA official also said there is an untapped export market, particularly Japan, which the Philippines could take advantage of if it produced more silk. — Emme Rose S. Santiagudo

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