Discovering the gray market

May 1, 2019 | 7:31 pm

By Tony Samson

MARKETERS are now paying attention to the growing “gray market.” As a marginalized group, old people with lots of money (OPLOM) may not qualify for party-list inclusion. In the 2015 census, the age group of those over 65 years old comprise only 5% of the population. The wealthy segment of seniors can embarrass their cohort age group, such as old people supported by their offspring (OPSBTO) who may have a better chance of party list representation, with a sprightlier acronym like: Just Old Leftovers and Grandparents Society (JOLOGS).

There are challenges for marketers targeting the OPLOMs. Their closets and garages are already full. It’s a market that already has all it needs or wants. So, they no longer buy suits and jackets on impulse, unless they had a liposuction done or survived a debilitating affliction to evolve into the retailers dream for “wardrobe makeover.”

How do OPLOMs spend their still considerable disposable income?

They buy expensive treats. And they don’t bother to take photos as they have little motivation to post anything on their social media, except chats — have you already seen the Avengers? Purchased experiences include traveling in comfort, flying business and checking in at a nice hotel which serves flaky croissants in their buffet breakfasts. Fine dining that does not require waiting in line is an item in the to-do list.

In a wonderful ad from a budget airline, the billboard features a tag — just because you’re old doesn’t mean you don’t want to try new adventures. The photo is of an unaccompanied senior who looks fit in his tank top, on a beach. Yes, that captures the spirit.

Wellness at an advanced age is distinct from illness, which can also eat up the disposable income, even with insurance and what it does not cover. This classification doesn’t include gym (too much sweat) but pampering that is supposed to reward age. Body scrubs, hot oil scalp massage, and coffee and cakes are trivial pursuits worth considering. There is too the no-longer-fashionable ballroom dancing session that comes with a regular dance instructor. More au courant is yoga, pole dancing, or, for the less nimble, taichi — push the mountain; part the clouds.

Downsizing lifestyles for empty-nesters can involve moving to a smaller space. To unburden the clients from paying for all sorts of support staff like gardeners and pool cleaners, the big house can be sold. This is called monetizing the assets — let’s enjoy the money while we can. Ancillary services here include property swaps and trade-ins, as well as storing or selling of surplus house accessories like furniture and art works. The latter is fueling a growing art auction market.

Banks look at high net worth individuals, like OPLOMs, for wealth management. A financial adviser with empathy for clients who repeat themselves is a prized talent for banks. They defend their customers from elderly abuse to which they may be subjected by relatives and caregivers — is that thing I signed a gate pass or the deed of sale for my proprietary club membership?

“Gray market” has another meaning, referring to market activities that are under the GDP radar, but not necessarily illegal. It’s the “black market”, a darker shade of gray, that is off-limits. Transactions in the gray market may not issue receipts and are conducted mostly in cash. Such activities comprise a whole range of services from pet grooming to online sale of cookies.

The gray-to-gray market refers to oldies availing themselves of services in the gray sector. This may entail inter-generational activities, such as an old male accompanied by a much younger female, who is referred to in confectionary terms, such as “eye candy” which is sugar-free. It is a term used for an attractive human accessory applicable to both genders. The expiry date is usually years away.

Curiously, eye candy only refers to an escort accompanying a very much older companion. Attractive and same-age pairs (two eye candies) are called a power couple with their names abbreviated and fused together like a shop that serves iced cappuccino — Jejune? For Jeff and June.

With the growing gray market, restaurants that hope to attract this niche are advised to keep the music low, explain the menu twice, and keep the draft from the aircon aimed at the empty spaces.

Tony Samson is Chairman and CEO, TOUCH xda

ar.samson@yahoo.com

Performance projections for ASEAN, select major Asian economies

May 1, 2019 | 6:00 am

THE PHILIPPINES will remain “resilient” with the rest of Southeast Asia and the region’s three major neighbors in the north, “heightened global risks and stronger external headwinds” notwithstanding, with the country’s economic growth picking up this year and the next, according to latest assessments the ASEAN+3 Macroeconomic Research Office (AMRO) released early this morning. Read the full story.

AMRO expects PHL economic growth to pick up

May 1, 2019 | 6:00 am

The ASEAN+3 Regional Economic Outlook (AREO) 2019, titled “Building Capacity and Connectivity for the New Economy”, put AMRO’s projection for Philippine gross domestic product (GDP) expansion at 6.4% this year — retained from the last estimate in February under the group’s 2018 Annual Consultation Report on the country which in turn was bumped up from the 6.3% penned in the January update of last year’s AREO — and 6.6% next year from the three-year-low 6.2% in 2018.

AMRO — initially formed as a company in April 2011 and transformed into an international organization in February 2016 — conducts macroeconomic surveillance and supports implementation of the Chiang Mai Initiative Multilateralization currency swap arrangement which the 10 members of the Association of Southeast Asian Nations (ASEAN), as well as China, Japan and South Korea (ASEAN+3) adopted to help avert any financial crunch.

Its latest projections compare to projections of two credit raters as well as multilateral lenders and international organizations that slashed estimates in the face of the delayed mid-April enactment of the Philippines’ 2019 national budget and external factors like simmering Sino-US trade tensions. Specifically, latest GDP growth projections are 6.2% for Fitch Ratings; 6.3% for S&P Global Ratings; 6.4% for the World Bank and the Asian Development Bank, as well as 6.5% for the International Monetary Fund, as well as by the UN Department of Economic and Social Affairs, the UN Conference on Trade and Development and the five UN regional commissions including the United Nations Economic and Social Commission for Asia and the Pacific.

The inter-agency Development Budget Coordination Committee in mid-March slashed its 2019 GDP growth assumption to 6-7% from 7-8% originally as the government operated on a reenacted budget, and some state economic managers have said the government will be hard-pressed to catch up with the state spending program this year.

Under AMRO’s latest GDP growth projections, the Philippines will be outpaced by Vietnam but will still be better off than ASEAN’s three other major economies (Malaysia, Singapore and Thailand), even China, as well as the ASEAN+3 region as a whole for both 2019 and 2020.

AMRO also sees headline inflation slowing to a flat three percent this year and next — in line with central bank forecasts for the same years — from 2018’s 5.2% that was a near-decade peak.

In its latest assessment, the group said “[e]conomic growth is expected to gradually recover on the back of buoyant domestic demand and will likely expand by 6.4% in 2019, albeit with the balance of risks to growth tilted to the downside.”

AMRO noted that “buffers remain adequate” even as the country’s “external position has weakened” as the current account deficit widened to an equivalent of 2.4% of GDP in 2018. Latest central bank data show gross international reserves rising for the fifth straight month to $83.199 billion last month, the biggest amount in nearly two-and-a-half years and “more than sufficient to cover the country’s gross external financing needs.”

“Monetary conditions have tightened, but credit continues to expand,” the group noted in its latest report, adding that “[c]redit growth is anticipated to remain elevated, but as real borrowing cost starts to rise, it is likely to moderate.”

“Major risks” to the Philippine economy, the group noted, “are mostly short-term ones”, citing “escalating global trade tensions, still-”elevated inflation” amid “uncertainty from global oil prices” as well as “[r]apid credit growth over the past several years [that] could give rise to financial vulnerabilities.”

“Overall,” it said, “risks appear to be moderating.” — Reicelene Joy N. Ignacio

S&P upgrades Philippine debt rating

May 1, 2019 | 12:33 am

By Bettina Faye V. Roc
Associate Editor

S&P GLOBAL RATINGS has raised the Philippines’ credit rating by a notch, citing above-average growth and strong external and fiscal position which have boosted the country’s economic profile.

The debt watcher on Tuesday raised the country’s long-term sovereign credit rating to “BBB+” from “BBB,” bringing it a step closer to bagging a single “A” grade.

S&P assigned a “stable” outlook to the rating, which means it expects to maintain its grade in the next six months to two years as the economy is likely to remain strong over the medium term.

S&P also affirmed its “A-2” short-term rating on the country but revised the transfer and convertibility assessment higher to “A-” from “BBB+”.

The credit rater’s latest action puts its assessment of the Philippines a step higher than those of its peers. Fitch Ratings and Moody’s Investors Service affirmed their “BBB” and “Baa2” ratings — a notch above the minimum investment grade — on the country in December and July last year, respectively, with corresponding “stable” outlooks.

“We raised the rating to reflect the Philippines’ strong economic growth trajectory, which we expect to continue to drive constructive development outcomes and underpin broader credit metrics over the medium term. The rating is also supported by solid government fiscal accounts, low public indebtedness, and the economy’s sound external settings,” S&P said in a statement on Tuesday.

The credit rater said supportive policies and an improving investment climate has helped the Philippines achieve “consistently above-average economic growth” — which it expects to continue as long as the country stays the course.

S&P forecasts annual gross domestic product (GDP) growth at 6.3% this year, keeping the Philippines as one of the fastest-growing economies in the region. It also sees the economy expanding by 6.5% in 2020, 6.6% in 2021, and 6.7% in 2022, reflecting its view of sustained growth on the back of private consumption and investment growth.

“The economy’s constructive trajectory should be underpinned by strong household and company balance sheets, continued income growth, sizeable inward remittance flows, and an adequately performing financial system,” it said.

The debt watcher noted the decline in the country’s unemployment rate as well as economic and fiscal policies that have resulted in “manageable” fiscal deficits and improved spending and revenues, citing in particular the government’s Comprehensive Tax Reform Program as an effective measure as it aims to keep finances sustainable while funding the government’s “aggressive” infrastructure spending.

WATCHING
Looking ahead, S&P expects general government deficits to remain stable, which will lead to a gradual decline in its debt burden.

For this year, it expects a below-program fiscal deficit of 1.8% of GDP following delays in the passage of the 2019 national budget. It warned that a repeat of this episode could be credit negative for the country.

S&P also flagged inadequate infrastructure as a key constraint to the economy, along with volatile export markets.

“[W]e continue to view as imperative the closure of infrastructure gaps and improvements in the business climate through greater political stability and regulatory reforms, in order for the Philippine economy to continue to expand at or near its long-term potential growth rate,” S&P said.

Meanwhile, the country’s external position, supported by remittances and services exports, will remain a key rating strength, with the debt watcher noting that its rising current account deficit, amid overheating concerns, is “largely investment driven.”

S&P, however, noted that a component of the government’s tax reform program which looks to rationalize incentives while reducing the corporate income tax rate may affect investor sentiment and be a risk to foreign direct investments.

On the other hand, the debt watcher said the Bangko Sentral ng Pilipinas’ (BSP) actions are “broadly neutral” to its ratings as the regulator’s effectiveness is expected to be intact over the medium term, supported by amendments to the BSP Charter passed earlier this year and “the employment of market-based monetary instruments, and the gradual reduction of its reliance on reserve requirement ratios.”

“We consider that a deeper and more diversified financial and capital market would further improve the effectiveness of policy transmission and facilitate improved credit metrics,” S&P said.

The debt watcher said it may raise its ratings on the Philippines over the next two years if the government “makes significant further achievements in its fiscal reform program, or if the country’s external position improves such that its status as a net external creditor becomes more secure over the long term.”

Meanwhile, a significant slowdown in GDP growth or higher-than-expected general government debt could lead to a cut in its credit rating.

Economic managers said S&P’s latest rating action affirms the country’s sustained economic performance, as well as policy and structural reforms that will continue to boost its prospects.

“S&P Global’s credit rating upgrade for the Philippines by one notch higher to “BBB+” is an undeniable tribute to President [Rodrigo R.] Duterte’s unwavering commitment to bold reforms and sound economic policies as embodied in the 10-point Socioeconomic Agenda of the administration and his strong political will to get these tough initiatives done at the soonest,” Finance Secretary Carlos G. Dominguez III was quoted as saying in a statement from the government’s Investor Relations Office (IRO).

BSP Governor Benjamin E. Diokno said S&P’s rating upgrade is a recognition of sound economic management, prudent monetary policy, and strong financial sector supervision.

“Over the years, the BSP has remained committed to its price and financial stability mandates, providing an enabling environment for the economy to flourish. Armed with a new charter that strengthens its ability to carry out its primary mandate of price stability and supervise the banking sector, the BSP will continue to lend support to the economic development goals of the country,” Mr. Diokno said in the same IRO statement.

National Treasurer Rosalia V. De Leon said the government remains committed to fiscal discipline even as it continues to invest in infrastructure and social services.

BSP Deputy Governor Diwa C. Guinigundo said in a text message that the upgrade “would bring more interest among foreign investors to participate in the growth process and in the end further establish and strengthen the upward trajectory of the Philippine economy.”

“The biggest challenge to us is to pursue sustainability: sustainability of policy and institutional reforms, growth and public finance. We also need to address the current account shortfall due to large merchandise trade deficit and ensure that inflation returns to the target range of 2-4%. With splendid record, I am sure we can do it,” Mr. Guinigundo said.

Inflation could have eased further in April — central bank

May 1, 2019 | 12:32 am

THE OVERALL INCREASE in prices of widely used goods could have eased for the sixth straight month to a 20-month low in April as a continued decline in rice prices and the peso’s appreciation offset upward pressures from higher fuel and electricity costs, the Bangko Sentral ng Pilipinas (BSP) Department of Economic Research (DER) said in a statement to journalists on Tuesday.

“The BSP Department of Economic Research projects April 2019 inflation to settle within the 2.7-3.5% range” when the Philippine Statistics Authority (PSA) reports official data on May 7, according to a statement e-mailed to reporters.

“Higher domestic oil prices and the slight upward adjustment in electricity rates are seen to provide upward price pressures for the month”, although “these pressures may be partly offset by the continued decline in rice prices and by peso appreciation”.

Bills of the Manila Electric Co. — the country’s biggest electricity distributor — rose for the third straight month in April, by P0.0633 per kilowatt hour (/kWh) to P10.5594/kWh from P10.4961/kWh in March.

Energy department data also show that, as of April 30, year-to-date fuel adjustments at the pump amounted to net increases of P8.80/liter for gasoline, P6.20/liter for diesel and P4.95/liter for kerosene.

And in a press briefing last Monday, Trade Secretary Ramon M. Lopez said rice now retails for about P34-38 per kilogram (/kg) from as high as about P50/kg a year ago, while PSA data show retail price of regular milled rice easing by 0.9% to P39.55/kg in the first week of April from P39.91/kg a year ago, while that of well-milled rice edged up by 0.34% to P43.87/kg from P43.72/kg in the same comparative periods.

Rice accounts for 9.59% of the theoretical basket of goods used by a typical household that is the basis for computing year-on-year price changes, while liquid fuel, solid fuel, gasoline and electricity contribute 0.13%, 1.22%, 1.28% and 4.8%, respectively.

“Moving forward, the BSP will continue to closely monitor evolving price trends and will undertake necessary measures towards its commitment to price stability,” the BSP-DES said.

In an e-mail, Nicholas Antonio T. Mapa, senior economist at ING Bank NV-Manila, noted that “[t]he April print will mark the third month that inflation will be back within target as supply chains continue to normalize after the 2018 episode, which saw inflation breach the upper end of the BSP’s target band.”

“Given the supply-side nature of last year’s breach, inflation has plunged back to earth quickly with the latest BSP inflation forecast at 3.0% for both 2019 and 2020. Meanwhile, inflation expectations remain well anchored with the latest BSP survey among private sector forecasters pointing to inflation settling at 3.3% for the year,” Mr. Mapa said.

“BSP has vowed to remain data-dependent in its actions and will have three months’ worth of within-target inflation prints to consider. Furthermore, given the forward-looking nature of inflation targeting, inflation expectations and forecasts both point to inflation remaining within target for the next two years. Given BSP Governor (Benjamin E.) Diokno’s recent remarks hinting at a rate cut and RRR (reserve requirement ratio) reduction within the year, we expect that we are getting closer to the central bank finally reversing its ultra-aggressive stance of yesteryear.”

LOWER-INCOME HOUSEHOLDS
Inflation, as experienced by low-income households, was lower in March driven mainly by the easing price increase in food and beverages, the PSA reported on Tuesday.

The March inflation turnout for goods and services used by households at the bottom 30% income segment stood at 4.6%, slower than the year-on-year price increase of five percent in February.

That compared to a 3.3% headline inflation experienced nationwide by the average household in March, even as the consumer price index (CPI) used in measuring headline inflation has 2012 as the base year while the CPI for the bottom 30% income households uses 2000 prices.

The CPI for the bottom 30% income segment has a heavier weighting for the food, beverages and tobacco sub-index to reflect the poor’s consumption patterns.

The food, beverages and tobacco sub-index rose 4.9% year on year from 5.6% in February. Food alone logged a 4.3% growth versus the preceding month’s five percent.

The cost of utilities, consisting of fuel, light and water, accelerated to 4.2% in March from February’s 2.7%. Faster increases were also recorded in clothing (three percent from 2.9%) and services (3.7% from 3.5%).

Housing and repairs were steady at 4.3% as well as the “miscellaneous” sub-index at 2.4%.

Inflation experienced by poor households in the National Capital Region was recorded at 2.3% in March, slower than the 2.9% posted in February. Those that are outside of Metro Manila also experienced a slower inflation trend at 4.6% from five percent.

In an e-mailed reply to questions, University of Asia and the Pacific economist Cid L. Terosa said that the prices of rice and other agricultural products “were relatively stable” in March.

“This contributed significantly to the slowdown in the index for food, beverages and tobacco,” Mr. Terosa said.

“We cannot discount the fact, however, that the base year effect was evident given the high inflation rate [of 5.8%] in March 2018.”

In a separate e-mail, Union Bank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion said that the inflation experienced by the low-income households “somehow mimics” headline inflation.

“It should be noted that headline inflation has been on a slowdown this 2019. Thus, a slowdown of the bottom 30 inflation is not far behind. In fact, I suspect that the slowdown in this particular population segment is faster…” Mr. Asuncion said. — Reicelene Joy N. Ignacio with MAM

Economic managers give ‘conservative’ estimates for Q1 GDP expansion

May 1, 2019 | 12:31 am

By Charmaine A. Tadalan
Reporter

PHILIPPINE ECONOMIC GROWTH can be expected to have steadied at slightly “above six percent” last quarter, two state economic managers said separately when sought for estimates on January-March gross domestic product (GDP) expansion that will be reported on May 9.

Socioeconomic Planning Secretary Ernesto M. Pernia said he expects first-quarter GDP growth at “above six percent” while Trade and Industry Secretary Ramon M. Lopez gave a 6.2-6.4% range.

Philippine GDP has been growing by a slower rate of at least six percent since the fourth quarter of 2017 (6.6%), clocking in at 6.5%, 6.2%, six percent and 6.3% in last year’s first to fourth quarters, respectively. The government last March reduced its 2019 GDP growth target to 6-7% from 7-8% originally in the face of delayed budget enactment, which was slashed by P95.3 billion to P3.662 trillion when it was signed into law four months late in mid-April.

“Lower inflation motivated more spending of people, households and election-related spending,” Mr. Pernia told reporters on the sidelines of the Sustainable Development Goals web site launch in Pasig City on Tuesday.

“The bigger happening was the lowering of the inflation from 6.7% [in September and October last year] to 3.3% [in March] and hopefully even lower.”

Asked if first-quarter growth could have been faster than that of the preceding three months, Mr. Pernia replied: “hopefully, yes.”

On Monday, Mr. Lopez said he chose to be “conservative” in his first-quarter GDP growth expectation.

“I’ll be conservative, I think… close to maybe 6.2-6.4%,” Mr. Lopez told BusinessWorld on the sidelines of a Rice Traders Forum in Intramuros, Manila.

“Maganda naman ang sectors like infrastructure, ‘Build, Build, Build,’ manufacturing [did relatively well],” he said.

“Kaya conservative kasi nga first quarter na-delay ‘yung budget kaya conservative na ‘yung 6.4%”

A senior official of the National Economic and Development Authority (NEDA), which Mr. Pernia heads as director-general, cited the impact of El Niño-induced dry spell among the factors that has begun weighing on growth.

“With respect to agriculture, it’s still the El Niño, but of course that will be mitigated by how well the sector has prepared and we take it has,” NEDA Undersecretary Rosemarie G. Edillon said in a telephone interview on Monday.

“With respect to industry and services [components of GDP], ang naging problema natin was the reenacted budget, pero ang mitigating factor dun is the campaign-related activities [ahead of the May 13 mid-term elections].”

SEC eyes five-year grace period for higher float

May 1, 2019 | 12:30 am

THE SECURITIES and Exchange Commission (SEC) is looking at giving listed firms five years to comply with the planned increase in minimum public ownership (MPO), a senior regulatory official told reporters on Tuesday.

“We’ll probably allow a five-year compliance period. The idea is, rather than try to catch the market… ang thinking is give them sufficient time kasi may concerns on market volatility,” SEC Commissioner Ephyro Luis B. Amatong told reporters on the sidelines of the Sustainable Finance Dialogue Forum in Makati on Tuesday.

The corporate regulator has long been planning to raise the MPO to 20% from 10% currently, a floor that has been in place since 2011. Its initial plan was to gradually raise the minimum public float to 15%, before the full target of 20%.

Mr. Amatong noted “[t]here will be many companies that will have to issue in order to comply with the 20%, some of them very big companies. So ’yun ’yung pinag-uusapan na approach (so that’s the approach we’re looking at).”

In a 2017 briefing, the SEC said that 68 out of 264 publicly listed firms had a public float lower than 20%. Of these, 39 companies had an MPO of less than 15%.

The same presentation showed that the stock exchange can raise more than P130 billion should the firms comply with the 20% MPO. That estimate was based on stock prices at a time when the PSE index was trading at the 7,800 level — the same level it is moving in now.

Despite talks of implementing the five-year compliance period, Mr. Amatong declined to give a timetable on the release the final rules.

He said the corporate regulator will first have to issue the revised guidelines for Real Estate Investment Trusts, or REITs, within this quarter.

The commission initially targeted to implement the plan by 2020.

So far, it has already required firms seeking to conduct an initial public offering to comply with the 20% MPO through a memorandum released in November 2017.

The only company that was affected by the new rule was DM Wenceslao & Associates, Inc., which was the sole firm to have braved the stock market in 2018 amid market volatility. — Arra B. Francia

Cebu Pacific cancels more flights

May 1, 2019 | 12:07 am

By Denise A. Valdez, Reporter

CEBU PACIFIC on Tuesday said it is canceling around ten flights a day this month, as part of efforts to streamline its operations.

“For the month of May, Cebu Pacific will be reducing approximately 10 flights a day out of a daily operations of 400 flights. Cebu Pacific is currently reviewing adjustments required for June and beyond,” Cebu Air, Inc., operator of the budget carrier, said in a disclosure to the stock exchange.

On Monday evening, the Gokongwei-led airline said 58 round-trip flights until May 10 will be canceled. This is in addition to the 23 flight cancellations from April 28 to 30 earlier announced.

“Over the past few days, Cebu Pacific has seen an unprecedented level of disruption to its operations, and its passengers are experiencing extended delays and some on-the-spot cancellations. To create space in its schedule for operational recovery, minimize rolling delays and give passengers the chance to make alternate travel plans, Cebu Pacific has to temporarily reduce the number of its flights given the current operating conditions, particularly in its Manila hub,” it said.

Among the canceled flights are those linking Manila to Cebu, Dumaguete, Davao, Puerto Princesa, Tuguegarao, Bacolod, Iloilo, Caticlan, Butuan, Zamboanga, Bohol, Legazpi, Cagayan de Oro, Roxas, Ozamiz and General Santos. Flights linking Zamboanga to Cebu and Tawi-Tawi are also affected.

Asked if Cebu Pacific may face sanctions because of these flight cancellations, the Civil Aeronautics Board (CAB) said it may be too early to tell at this point as it has not received a full report of the situation.

“It’s too early to tell, because we’re still in the process of inquiring into the circumstances surrounding the cancellations. Like for example, they adverted to certain conditions in the airport, and we need specifics. So we asked them to detail those circumstances, then we are going to validate them, whether they are valid or not. And it’s only then that we could take action on whether they should be sanctioned or not,” CAB Executive Director Carmelo L. Arcilla told BusinessWorld in a phone call Tuesday.

But the Manila International Airport Authority (MIAA), operator of the Ninoy Aquino International Airport (NAIA), expressed support for Cebu Pacific.

“If this is what it takes to address their operational constraints, so be it. We believe all factors were carefully considered by Cebu Pacific in reaching a decision as crucial as this,” MIAA General Manager Ed V. Monreal said in a statement Tuesday.

In exchange for the inconvenience, Cebu Pacific said passengers affected by the flight cancellations will be given a round-trip travel voucher that may be used to book an alternative flight.

Following Cebu Pacific’s rationalization efforts, flag carrier Philippine Airlines (PAL) said it will not be following the same initiative for its operations.

“In response to numerous queries from the public and our passengers, Philippine Airlines wishes to provide assurance that we are operating our full regular schedule of flights for both domestic and international route networks. Our flights and airport operations remain normal at our hubs in Manila, Cebu, Clark and Davao,” it said in a statement Tuesday.

A century of classic designs

May 1, 2019 | 12:06 am

IN THE late 1800s, German design professionals envisioned that German companies would be as competitive as those in England, the United States, and the global market. In the 1900s, 12 artists and 12 companies joined forces to establish Deutscher Werkbund.

The results of this collaboration are on view in the exhibit 100 Years of Deutscher Werkbund at the Metropolitan Museum of Manila, a presentation of the Goethe Institute supported by Design Week Philippines,

Deutscher Werkbund (DWB) — a German association of artists, architects, designers, and industrialists — was founded by architects Hermann Muthesius and Henry van de Velde in Munich in October 1907. Werkbund was divided into two factions: Muthesius advocated for mechanical mass production; while Van de Velde valued artistic expression. The association aimed at “the refinement of trade work in collaboration with the arts, industry and crafts through a process of education, propaganda and a united response to all relevant issues,” according to the exhibit posters.

“They want to design everything from the sofa to the city buildings. They don’t want to do a design for the upper class. They want to design for all people,” exhibit curator Beate Schmidt said during the exhibit walkthrough on April 4.

Arranged in seven chronological sections from 1907 to 2007, the exhibition includes the first DWB products with brand logos and printed posters, prototypes of housing models in the 1920s such as the Weissenhof Estate, timeless furniture designs including the Mies van der Rohe armchair (1927) and the Giancarlo Piretti folding chair (1967), minimalist kitchenware, and the question posted by the association of its future.

“The works of these architects, artists, and companies reflected architecture, art and design of the entire century in their respective political and social contexts,” Ms. Schmidt said.

As of 2007, the DWB has 980 members. It also has members in associated organizations: 255 in Werkbund Bavaria, 205 in Werkbund Berlin, and 200 in the Werkbund North.

According to Ms. Schmidt, the DWB is currently pursuing innovations for the changing environment, citing the future of the growing population in the city and transportation. With that, the members asked themselves, “Do they still need us?”

100 Years Deutscher Werkbund runs until May 25 at the Metropolitan Museum of Manila, Roxas Blvd., Malate, Manila, which is open Mondays to Saturdays from 10 a.m. to 5:30 p.m. Admission is P100. — Michelle Anne P. Soliman

Property company inks deal to expand in Clark Global City

May 1, 2019 | 12:06 am

THE developer of Clark Global City (CGC) will sublease about two hectares of land to businessman Jettson Yu, who plans to build an office tower and retail hub.

In a statement Tuesday, Global Gateway Development Corp. (GGDC) said it has signed a memorandum of agreement with Proactive Properties Development Corp. for the sublease of a 2,208-square meter lot in CGC.

Proactive Properties plans to develop the land in two phases, with the first phase to include a commercial center with international retail shops. The second phase will cover the development of a 12-storey office building that will cater to international companies looking for tax incentives.

The company aims to take advantage of the demand for more office and retail spaces in Central Luzon within the next five years.

“Its growing and talented population of more than 2.1 million only shows that a minimum of 300,000 square meters of office locations and 200,000 square meters of commercial retail spaces will be needed within the next five years,” GGDC quoted Mr. Yu as saying in a statement.

Mr. Yu also owns real estate consulting group Prime Philippines.

“Having Proactive Properties onboard in our endeavor of building CGC as a new central business district aligns with our mission of building this generation’s new center of commerce, life and innovation,” GGDC Chairman Dennis A. Uy said in a statement.

Several locators have previously signed agreements with GGDC, including DataLand, Inc., Suyen Corp., SM Prime Holdings, Inc., and Century Properties Group, Inc.

GGDC is aiming to transform CGC into a new business hub outside Metro Manila. Its masterplan includes top-grade office buildings, upscale retail outlets, academic centers, sports centers, an urban park, an integrated resort and casino, and modern support services and amenities.

GGDC is a wholly owned subsidiary of Udenna Development Corp., the property arm of Mr. Uy’s Udenna Corp. The Udenna Group also has interests in petroleum and oil, logistics, infrastructure, education, and convenience stores, among others. — Arra B. Francia

Banana protest staged over removal of ‘indecent’ art

May 1, 2019 | 12:05 am

WARSAW — Around 1,000 people, many eating bananas to make their point, protested in front of Warsaw’s National Museum on Monday over a decision last week to remove artworks deemed “indecent” by the museum’s director.

One work, a 1973 video Consumer Art by Polish artist Natalia LL and stills from the video, show a woman eating a banana in sometimes lascivious poses. Only the video was removed on Friday according to the museum’s officials.

The museum also removed an installation by artist Katarzyna Kozyra depicting a woman walking two men dressed up as animals on a leash.

The museum’s director, Jerzy Miziolek, asked to have the artworks removed last Friday, saying that “certain topics related to gender shouldn’t be explicitly shown,” according to Polish newspaper Gazeta Wyborcza.

The museum has since promised to reinstate the artwork, but the protests went ahead anyway.

“We are against censorship in our country, especially in arts,” said 25-year-old lawyer Marta Syrewicz, walking toward the protest with a banana in hand.

The controversy follows criticism of the Culture Ministry and of the ruling conservative Law and Justice (PiS) government for interfering in decisions on who heads cultural institutions like theaters and museums since taking power in 2015.

For example, in 2017, the Culture Ministry refused to pay 300,000 zlotys that it had previously promised to a theater festival in the city of Poznan as it was critical of the festival’s curator, Croatian artist Oliver Frljic.

The Culture Ministry said in a statement published on its website that it plays no role in deciding cultural institutions’ exhibition or repertoire policies, but it does follow up with the directors of these institutions regarding citizens’ complaints.

The ministry attached a copy of a letter from a concerned parent who said their child had been “traumatized” by the exhibition at the National Museum, which featured images of women undressing and children stabbed with knives.

A number of Polish actors and politicians posted images of themselves eating bananas on social media, using hashtags like #jesuisbanan and #bananagate to protest what they called censorship by the museum and Culture Ministry.

“The changes to the exhibition are in fact part of our commitment and new more dynamic vision for the functioning of the institution and not the depreciation of the museum’s collection or its censorship,” Miziolek said in a statement published on the museum’s website on Monday.

The PiS has sought to support more conservative, traditional values, embracing Catholicism and rejecting the promotion of LGBT rights ahead of parliamentary elections this year. — Reuters

Maynilad services affected by algae proliferation in Laguna Lake

May 1, 2019 | 12:05 am

MAYNILAD WATER Services, Inc. said its customers in the cities of Muntinlupa, Las Piñas, Parañaque, Imus and Bacoor will experience low water pressure to no water supply until May 14 due to “reduced water production brought about by unusual algae proliferation” in Laguna Lake.

In a Facebook post on Tuesday, Maynilad said the algal bloom was first observed on April 23, and is expected to continue until the end of the summer. The proliferation of algae was attributed to the warmer temperature brought by El Niño.

“(This) will require the implementation of more radical measures, which means that the water production in our Putatan Facilities will be further reduced for the time being,” the company said.

Maynilad said the excessive algae required additional cleaning and de-clogging at the Putatan water treatment facilities.

“Rest assured that we are closely monitoring the water quality in Laguna Lake. We are likewise continuously finding ways to optimize the limited water supply during this time,” Maynilad added.

Metro Pacific Investments Corp. (MPIC) and DMCI Holdings, Inc. hold a 52.8% and 25.24% interest, respectively, in Maynilad. Japanese firm Marubeni Corp. has a 20% stake in the utility, while the balance is held by other shareholders.

MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. — Janina C. Lim

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