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Some prepare for bear market as local stocks sink

PHILIPPINE equities sank the most in four years, and some analysts are already watching out for a bear market.

As fears over the spreading coronavirus escalate, the Philippine Stock Exchange index lost 3.9% to 6,909.84 on Wednesday, taking its three-day slump to 6.8%. Manny Cruz, a strategist at Papa Securities Corp. in Manila, says the gauge could test the 6,692.23 level in the coming months, marking a 20% slide from its 2019 high, as concerns over the outbreak and its impact undermine expectations of stronger economic and earnings growth this year.

“It wouldn’t be far to enter a bear market with the continued uncertainty,” said Mr. Cruz, who correctly called a market rout in 2018, when earnings didn’t support valuations. “If more advanced economies are taking a hit, what more with the Philippines? While we have one of the fewest cases, this can quickly and dramatically change, just like what happened in South Korea.”

Virus fears are hounding the Philippines even as it has had only three cases so far. Now the nation’s benchmark gauge is about 3% away from entering a bear market. With Wednesday’s sell-off, its year-to-date loss has mounted to almost 12%, the world’s worst performance after Lebanon and Thailand, which entered bear territory on Monday.

Philippine shares were already hit by President Rodrigo R. Duterte’s verbal attacks on some of the nation’s biggest business groups for contracts he alleged were disadvantageous to the public. Still, before the outbreak, analysts and investors came into 2020 with an optimistic outlook. The nation’s biggest money manager, BDO Unibank, Inc., and First Metro Investment Corp. were among those that anticipated a double-digit gain for the nation’s equity index this year, thanks to accelerating economic and earnings growth. But with the coronavirus, things have changed.

“It’s unthinkable earnings won’t take a hit,” Mr. Cruz said, adding that 10% profit growth this year for Philippine companies could be“optimistic” because the outbreak has affected supply chains and consumer behavior. “There will be a big dent in first-quarter earnings that will extend into the next three months.”

He expects rallies to be short-lived as risk-off sentiment has yet to peak since infections are still growing globally. “The next stage from here will be talks and fears of a recession” once the virus hit becomes apparent on the economies affected, he said.

And the effect will extend beyond the tourism and consumer sectors, he warns. A slowdown in manufacturing would slow demand for loans and electricity, creating a “domino effect” on other industries and the economy, according to Mr. Cruz. That’s why he favors stocks where he sees a more muted impact, such as lenders and developers including Bank of the Philippine Islands, Security Bank Corp., Metropolitan Bank & Trust Co. and Ayala Land, Inc. — Bloomberg

MPIC takes ‘serious’ review as stocks fail to soar

By Denise A. Valdez, Reporter

METRO PACIFIC Investments Corp. (MPIC) needs a serious review of its business holdings amid a politically charged regulatory environment and declining investor enthusiasm in its asset class, company officials said.

After reporting a 69% surge in attributable net income to P23.9 billion in 2019, the listed infrastructure conglomerate said its earnings are evidently not translating to the performance of its share price.

Shares in MPIC closed P2.97 each on Wednesday, shedding nine centavos or 2.94%. It has been trading between P3.79 and P2.87 for the past 30 days.

“While we might attribute some of this to market factors and some to conglomerate discount, the discount (so we are advised) reflects concern on political developments,” MPIC Chairman Manuel V. Pangilinan was quoted in a Wednesday statement as saying.

Noting that the company have been asked about its outlook on investing in Philippine-regulated infrastructure, including means to raise capital to support such investments, he said it was difficult to provide an answer at the moment.

“There are no quick or easy answers to these questions but the current model of a listed infrastructure business with a wide pool of dedicated Philippine and foreign shareholders putting their faith in these long-term contracts needs serious review,” Mr. Pangilinan said.

“Meanwhile…, we are committed to completing our current projects while directing discretionary investment to warehousing, real estate and tourism,” he added.

MPIC is a majority investor in Maynilad Water Services, Inc., one of the two water concessionaires in Metro Manila that are being accused by President Rodrigo R. Duterte of benefitting from alleged “onerous” provisions in their concession contracts.

The holding company, which also controls power, tollroads, hospital and rail businesses, posted a core net income of P15.6 billion in 2019, up 4% from a year ago. System-wide revenues during the period stood at P424.1 billion, a 5% uptick from in 2018.

Substantial growth from power unit Manila Electric Co. (Meralco), increased traffic in domestic roads, and a higher number of patients in hospitals were key drivers of MPIC’s income.

The power business comprised 55% or P11.6 billion of MPIC’s net operating income. Tollroads accounted for 25% or P5.2 billion; water contributed 17% or P3.6 billion; and hospitals added 4% or P867 million. Other businesses such as rail and logistics posted a combined net loss of P352 million.

“Our 7% growth in contribution from operations reflects a decade and more of sustained capital investment to enable meaningful volume increases in all our major businesses,” MPIC President and Chief Executive Officer Jose Ma. K. Lim was quoted as saying.

But he noted the company’s expansion and “attempted constructive engagement on tariffs” with the government has not resulted favorably, as its various contracts are now being deemed as having onerous provisions.

Aside from Maynilad, the company also has long-pending tariff issues with the government through its tollroads unit Metro Pacific Tollways Corp.

“[T]he fall in our share price, along with the prices of other listed companies with government concessions, shows that despite our growth investors now attach sharply higher risk premiums for government adherence to contract,” Mr. Lim said.

He said this resulted in Maynilad’s inability to pay dividends, and MPIC recasting its investment program due to lower inbound cash flow, increased regulatory risk, and lack of investor enthusiasm.

“Ironically, even though there is huge demand for the services we provide, our discretionary investment spending beyond committed infrastructure projects will divert to less risky businesses like warehousing, real estate, and tourism,” he said.

MPIC has yet to announce its earnings and capital expenditure guidance for 2020 amid the uncertainties. But its board of directors approved a share buyback program of up to P5 billion until May 26.

It said the program might be triggered if the company’s stock is substantially undervalued, when there is high volatility in share prices, or there is any instance that would call for a buyback to improve shareholder value.

MPIC likewise reported operational highlights across its business units yesterday. Meralco’s core net income grew 6% to P23.8 billion due to a 6% increase in energy sales, lower borrowing costs and higher investment returns. Its power generation business, Global Business Power Corp., saw an 11% rise in core net income to P2.7 billion.

The tollroads unit posted an 18% increase in net income to P5.3 billion, driven by higher traffic in domestic roads and tariff adjustments in three expressways.

MPIC’s water business, operating through Maynilad and MetroPac Water Investments Corp., posted a total net income of P3.6 billion last year.

The hospital unit saw a 14% increase in core income to P2.7 billion, as it recorded an 11% increase in outpatient visits and 4% growth in inpatient admissions.

The rail segment, which operates the Light Rail Transit Line 1, contributed P319 million in MPIC’s core income.

“We will endeavor to at least match our 2019 Core Income in the year ahead, despite the challenges,” Mr. Pangilinan said.

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.

Force majeure an option if virus impedes telco rollout, says DITO

By Arjay L. Balinbin, Reporter

DENNIS A. Uy’s DITO Telecommunity Corp. on Wednesday said it has the option to invoke force majeure in case the novel coronavirus outbreak impedes the rollout of its services.

But the company said it has remedial measures to address the impact of the deadly virus on its rollout, one of which is to source materials, especially steel, from markets outside China.

Adel A. Tamano, DITO chief administrative officer, said under Philippine laws an outbreak such as the coronavirus can be considered a reason to declare force majeure.

“We can use that as legal basis. Let’s say if we have a delay, we can ask for a grace period. That’s the legal side [of it],” he told reporters on Wednesday on the sidelines of the inspection of a tower in San Francisco del Monte, Quezon City.

DITO Chief Technology Officer Rodolfo D. Santiago noted that Hubei province, where the new virus is believed to have originated, is one of the manufacturing hubs of China.

‘Yung impact sa rollout namin ay ‘yung sa (The impact on our rollout is on the) steel or tower components and fiber cable,” he said.

“But our vendors are confident since they have manufacturing plants in other countries. They would request their subsidiaries… to prioritize the supply for the Philippines,” he added.

Despite the situation, Mr. Tamano said DITO would stick to the timeline.

“We will find ways to mitigate all the effects of the situation so that our rollout will not be delayed,” he said. “Our position is very strong. Unless we have exhausted all the possible alternatives, that’s the only time we would consider citing a force majeure situation.”

DITO said last week that its commercial launch would be in March 2021 as indicated in its Certificate of Public Convenience and Necessity (CPCN). The “technical launch” will happen in July.

The National Telecommunications Commission will audit DITO’s compliance with the government’s requirement to cover 37% of the population nationwide with 27 megabits per second (mbps) during the “technical launch,” Mr. Tamano said.

A pre-commercial trial will begin in September, he said, adding that the commercial launch can also happen before March 2021.

For his part, Mr. Santiago said the company is “aiming to invest P150 billion this year.”

“There’s a possibility to spend less if we can improve efficiencies, which would also bring down costs for consumers,” he added.

Mr. Tamano said DITO has already drawn from the initial facility “worth $500 million through the Bank of China.”

President Rodrigo R. Duterte formally awarded DITO’s CPCN in July last year. If DITO fails to meet its commitments, its CPCN will be taken back by the government.

Lawmakers move to act on ABS-CBN franchise issue

SENATOR Franklin M. Drilon has filed the concurrent resolution that will allow ABS-CBN Corp. to continue its operation beyond the May 4 expiration of its franchise, while its renewal is pending in Congress.

This comes even as Senate President Vicente C. Sotto III stood firm that it would be best to pass the franchise bill, instead of a resolution.

Pag-uusapan muna ‘yun, hindi ako palo sa sinasabi ng NTC (National Telecommunications Commission) na kailangan ng resolution ng Senate,” Mr. Sotto said in a briefing, Wednesday.

(That will be discussed first as I don’t agree with what the NTC is saying that a Senate resolution is needed.)

Mr. Sotto said a resolution was not needed for the expiring franchise of a power distribution utility in Iloilo nor those of telecommunication companies.

The Department of Justice on Monday said Congress, through a concurrent resolution, may permit the NTC to issue a provisional authority to ABS-CBN subject to terms and conditions.

Mr. Sotto said he was also looking into a Supreme Court (SC) decision in 2004 that ruled that the validity of a franchise may be extended as long as an application for its renewal is pending in Congress.

He explained the 2004 memorandum of understanding that allowed the NTC to issue temporary permits was superseded by an SC ruling of the same effect.

“Therefore, a Supreme Court decision forms part of the law of the land. Kailangan pag-aralan naming mabuting mabuti ‘yan (We have to study that carefully).”

The resolution was filed with eight session days left before the 18th Congress goes on its March 14- May 3 break.

Sought for comment, Mr. Drilon said the chamber as a co-equal branch of the high court should not be “frozen into inaction.”

“If there is a dispute, then the matter is brought to the Supreme Court for adjudication. Until that time, there is nothing to prevent us from interpreting our own plenary power,” Mr. Drilon said in a separate briefing.

Presidential Spokesperson Salvador S. Panelo, meanwhile, said the resolution would be ineffective.

“There has been a Supreme Court ruling many years ago, a Supreme Court ruling cannot be as binding and effective as a law. They really need to do their work,” Mr. Panelo said in a briefing in Malacañang, Wednesday.

“If they can pass a resolution, I cannot understand why they cannot pass a law on that renewal or grant of a franchise.”

At the House of Representatives, a legislator has filed a resolution seeking to extend the legislative franchise of ABS-CBN until May 4, 2021.

“The extension of the current franchise of ABS-CBN for one year will give members of Congress enough time to thoroughly study and debate on the (11) bills filed in the House of Representatives,” Cagayan de Oro Rep. Rufus B. Rodriguez said in his House Joint Resolution 29, which was filed on Wednesday.

The lawmaker noted that ABS-CBN has not committed any violations, as testified by the representatives of NTC, Security and Exchange Commission, Bureau of Internal Revenue and the Department of Labor during a Senate hearing on Monday.

Currently, 11 bills are pending in the House committee on legislative franchises seeking to renew the franchise of ABS-CBN. One bill is seeking to renew the franchise of ABS-CBN Convergence, Inc.

Palawan Rep. Franz E. Alvarez, who chairs the committee, said that the panel is open to receive position papers of the supporters and opposers of the media network’s franchise renewal.

He added that formal hearings on the matter might start either in May or August.

As clarified by Justice Secretary Menardo I. Guevarra, ABS-CBN’s franchise will expire on May 4, 2020. Congress, on the other hand, has six session days left before it adjourns for its Easter recess. — Charmaine A. Tadalan and Genshen L. Espedido

Huawei launches Mate XS foldable smartphone with better screen

HUAWEI unveiled an upgrade to its folding smartphone on Monday, hoping that a faster phone with higher-quality display will encourage consumers to spend as much as $2,700 for the top-of-the-range version.

The new Mate XS arrives a year after the Chinese tech giant showed off its first folding phone, which had back-to-back screens that opened to create an eight-inch display. That device went on sale in China in November after the company improved the design.

The Mate XS has the same size display as its predecessor but comes with an improved gull-wing hinge mechanism and stronger wraparound screen, while boasting faster download speeds and longer battery life than the rival Samsung Galaxy Fold, Huawei’s top salesman Richard Yu told a launch presentation in Barcelona.

The folding phone will be priced at €2,499 ($2,710) for its premium model and goes on sale worldwide next month, said Yu, as Huawei pushed the price frontier for the most expensive smartphones even higher.

The launch was streamed from Barcelona, where the Mobile World Congress was due to be held this week before it was cancelled because of the coronavirus outbreak.

Sony meanwhile, showcased its newest Xperia 1 device as the Japanese company — which lies outside the top 10 smartphone makers by sales — targeted its niche audience of high-fidelity video fans.

FOLDING RACE
Samsung Electronics, the world’s top smartphone maker by volume, narrowly beat its Chinese rival in the folding race last year, but its launch was delayed after testers encountered problems with the screens.

The South Korean company is persevering with foldable technology and this month showed off a device shaped like a makeup compact that unfolded to look like a traditional smartphone.

The Mate XS, like last year’s Mate 30 smartphone, will lack access to a licensed version of Google’s Android operating system after the United States effectively barred its companies from supplying Huawei last year.

Huawei is offering users access to its own app store instead, but Yu said it remains committed to the Android ecosystem and to its longer-term partnerships with Google and other US companies.

“We believe technology should be open and available for everyone,” Yu said in his keynote speech.

Huawei also launched a speaker developed with French audio specialist Devialet, the first tablet in its Mate range and two new notebooks — a top of the range Matebook X Pro and Matebook D with 14-inch and 15-inch screens.

Huawei plans to hold a launch event for the P40, a 5G smartphone, in Paris next month, said Yu. — Reuters

Duterte accepts apology of network’s president

PRESIDENT Rodrigo R. Duterte said on Wednesday that he had accepted the apology of ABS-CBN Corp. after the top official of the network said in a Senate hearing on Monday that they were sorry if they had offended him.

“I accept the apology, of course,” he told reporters when asked to respond to the apology of Carlo L. Katigbak, the company’s president and chief executive officer.

Asked whether he supports the renewal of ABS-CBN’s franchise, he said: “I said I will leave it up to Congress.”

But he declined to accept the P2.6 million being refunded by the company for not airing his campaign ad during the 2016 presidential elections.

Wag na (Never mind). Ibigay nila sa ano (They should just donate it to) any charitable institution of their choice.”

When asked whether he would instruct the Solicitor General about his stand, he said he could not tell the state lawyer to stop once an official statement had been issued.

“The SolGen does not clear with me unlike the Secretary of Justice,” he said.

Meanwhile, the Supreme Court deferred action on the pleadings of broadcast company ABS-CBN and ABS-CBN Convergence, Inc. and the Office of the Solicitor General (OSG).

Public Information Chief Brian Keith F. Hosaka said the pleadings of both parties on the petitions for quo warranto and gag order will be taken up again on March 10.

“This is to give the Justices time to go over the pleadings submitted by the parties, including the comments recently filed by the respondents,” he told reporters in a mobile-phone message.

ABS-CBN filed its comments on the petitions of the state lawyers. The network said if the petition for quo warranto would be granted, it will send a “chilling effect” to the press as it could compromise freedom of speech and of the press.

It also denied the law violations it allegedly committed as claimed by the OSG.

The network said that issuance of a gag order is a violation of rights to free speech and free press. It also said that the state lawyer failed to show how its reports may “create a clear and present danger of impairing the proceedings before this Honorable Court” and it is just performing its mandate on information dissemination.

In the quo warranto petition, the OSG sought to cancel the legislative franchises of the network and its unit for allegedly violating the laws such as provision on foreign ownership restriction and operating a pay-per-view channel without regulatory approval, among others.

The state lawyer filed a petition for issuance of gag order to prohibit both parties from releasing statements discussing the merits of the case. — Gillian M. Cortez and Vann Marlo M. Villegas

Game developers group looking to add jobs in computer graphics

THE Game Developers Association of the Philippines (GDAP) wants to create higher-skilled jobs in the outsourcing industry amid the threat of automation.

“The lower hanging fruits might disappear soon because of automation,” GDAP President Alvin Juban said in an interview on Monday.

GDAP is seeking P7-8 million in annual government funding to localize a certification program for computer graphics.

Mr. Juban said the association created an English-language version of the Japanese Computer Graphic Arts Society test.

“We want the teachers certified and the certification body is us,” he said.

The CG Creator Certification Exam measures the test-takers’ knowledge in computer graphics, the results of which are currently recognized by over 70 prominent computer graphics, games, and animation studios in Japan.

This year, GDAP targets 2000 test-takers as it introduces the first translated test in the country in July.

The association has reached out to the Department of Information and Communications Technology and the Department of Trade and Industry to back the seed funding of the program for two to three years.

“Hopefully, every year they can provide it,” Mr. Juban said, noting that not all government agencies have fully committed yet.

GDAP is also looking for investors to back original content from the game development industry, with Mr. Juban saying that the country needs to institutionalize investment to improve the success rate in a high-risk industry.

The Information Technology and Business Process Association of the Philippines cut growth figures under a road map through 2022 due to geopolitical challenges, protectionism and automation.

The industry cut its revenue targets to a compound annual growth of 3.5-7.5% from 9.2% set in 2016, based on a study conducted by the Everest Group.

The combined animation and game development subsectors’ target fell to 6.8-11.7% from 14%. — Jenina P. Ibañez

‘We eat the same things’

By Joseph L. Garcia, Reporter

CHEF Myke “Tatung” Sarthou, like most people, may well have been content to stay in one place. As it is, however, man has a mandate to move, and despite it being a time of rest for him, he has managed to open two restaurants in less than a year.

“Just go with the flow. Eh nag-flow (and it flowed),” he told BusinessWorld with a chuckle during our visit to his latest restaurant, Pandan Asian Café in Quezon City, a Southeast Asian joint with coolly refined interiors designed by Ivy Almario.

While his other restaurant, Talisay, is a homecoming project, Pandan serves as both substitute and souvenir for travel. Mr. Sarthou might have been in the culinary scene for about 10 years, but he points to a previous life of writing about travel for a newspaper. The recipes and techniques are gleaned from his travels, as well as his study of Philippine cuisine, which opened up several crossroads in the attempt to summarize Southeast Asian cuisine. “I’m here to recreate favorite food memories of my travels,” he told BusinessWorld.

The café’s name also points to the attempt to make a narrative about the interconnectivity of Southeast Asia, a region to which the Philippines belongs, and from there, forms a community with Brunei, Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, and Vietnam. “[Pandan] an ingredient that lives in the same climate,” he said. According to him, we all use pandan, but in different ways: for example, in the Philippines, we use it to flavor and perfume rice, while some countries use it to flavor and wrap chicken. “It’s really about Southeast Asian diversity: how much we share, but how much we interpret it differently in our own cultures.”

THE FOOD
For our first course, Mr. Sarthou brought out a Vietnamese Platter, featuring fresh Vietnamese spring rolls, chicken and pork satay skewers, and fried shrimp rolls. All of the dipping sauces, mostly with a peanut base of varying consistencies, were made in-house. The fresh spring rolls — shrimp wrapped in greens and rice paper — had a freshness that jolted one awake. It’s perfect for setting the stage for the chicken and pork satay, which, despite its heft, proved to taste quite clean. The shrimp rolls — combining pork and shrimp within a crispy shell — also had the same neat properties, thus ensuring a long, relaxed meal that will never over-exert the palate.

We don’t believe that Southeast Asians have a culture of courses, and everything is immediately served at the same time. This is how we came to encounter the Char kway teow (stir-fried noodles with disputed origins from either Malaysia or Singapore), and their version of Lechon Macau. We had these alongside the remains of our Vietnamese platter (which serves three for P590). The noodles, made with fish cake, sausages, and cooked on a wok over an oven flame, displayed both verve and familiarity. As for the lechon (roast pig), it’s rare for us to meet a pig so elegant: it is silky, topped with a noisy crispy skin, and dressed with a ginger and light soy-based sauce.

We guess we can see the common thread of interconnectivity that Mr. Sarthou talks about: none of the dishes share a country of origin, but all together in one plate, they blended together, each flavor strengthening each other, and all boundaries forgotten. Note to diplomats: we’re all a step closer to world, or at least regional, peace with elegantly assembled lunches.

“We have the same cooking methods,” said Mr. Sarthou in a mixture of English and Filipino. “We sauté. We fry. We grill. We boil and stew. But the dishes are so different. Imagine how raw materials and people create something so different.”

We might have a soft spot for Southeast Asian cuisine simply because it tastes like home. However, Mr. Sarthou points to another reason for taking Southeast Asian cuisine more seriously. “We should see ourselves as a region, not just geographically,” he said. “It’s an issue of food security, and it’s an issue of cultural diversity within the region.”

When he speaks about food security, he means, “Look at the Philippines right now. Who supplies most of our food? China, America, Australia. If we don’t nurture ourselves as a region, anong mangyayari sa atin (what will happen to us)?” He continued: “If you’re able to nurture that interconnectivity and interdependence within Southeast Asia, probably, we’d be more secure as a region.

“We eat the same things. Kaya ’yan (we can do it).”

Pandan Asian Café is located at 76 Sct. Limbaga St. in Quezon City.

Yields on term deposits decline as COVID-19 worries affect rates

YIELDS ON the central bank’s term deposit facility (TDF) continued to decrease despite lower bids on Wednesday as investors remain wary of risks that may arise as the coronavirus disease 2019 (COVID-19) continues to spread and amid signals of another rate cut in the second quarter.

Tenders for the Bangko Sentral ng Pilipinas (BSP) term deposits totaled P173.668 billion on Wednesday, higher than the P130 billion offered by the central bank. However, total bids this week failed to beat the P183.468 billion seen last week.

Broken down, tenders for the one-week papers stood at P50.263 billion, surpassing the P40 billion on offer but lower than the P66.422 billion in tenders seen last week for the same offer volume.

Lenders asked for yields ranging from 3.75% to 3.8844%, a slimmer margin compared to the 3.75% to 3.93% logged last week. This resulted in an average rate of 3.825%, slipping by 0.51 basis point (bp) from last week’s 3.8301%.

For the 14-day term deposits, total bids amounted to P69.91 billion, higher than the P50 billion auctioned off and also surpassing the P57.718 billion in tenders logged last week.

Rates of the 14-day deposits fell within 3.8% to 3.9%, a thinner margin compared to the 3.75% to 3.975% band logged the previous week. This caused the average rate for the two-week deposits to clock in at 3.8654%, down by 1.05 bps from the 3.8759% seen on Wednesday last week.

Meanwhile, bids for the 28-day papers hit P53.495 billion, higher than the P40 billion up for grabs but failing to beat the P59.328 billion worth of tenders logged last week for the P50-billion offering.

Yields sought by banks for the one-month deposits ranged from 3.785% to 3.95%, a slimmer range compared to the 3.6525% to 3.99% margin seen last week. With this, average rate for the 28-day term deposits settled at 3.8918%, inching down by 0.66 bp from the 3.8984% seen a week ago.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the continued decline in TDF yields to market jitters amid concerns on the COVID-19 and to expectations of further easing next quarter.

“The sustained decline in BSP TDF yields, consistently since the start of 2020, may be largely brought about by the sharp declines in global interest rates…amid lingering concerns over the novel coronavirus,” Mr. Ricafort said in an e-mail.

He noted that the benchmark 10-year US Treasuries’ yield succumbed to “a new record low of 1.3055% on Feb. 25” due to “global risk aversion and sharp declines in US and global stock markets.”

Reuters reported that the S&P 500 and the Down Jones Industrial Average both shed more than 3% on Tuesday in their fourth consecutive session of losses. In Asia, Japan’s Nikkei stock index dipped by 0.92%.

So far, the COVID-19 has already infected some 80,000 people across the world and caused the dead of more than 2,600 people, majority of which are in China.

Mr. Ricafort added that the lower yields also came following signals from the BSP that the next rate cut could come as early as the second quarter.

“BSP TDF yields have also been lower recently after BSP Governor [Benjamin E.] Diokno earlier signalled possible 0.25-bp cut in local policy rates as early as Q2 2020 if supported by economic data, since BSP TDF auction yields are pegged on BSP’s policy rates,” Mr. Ricafort said.

Mr. Diokno said earlier this month that the BSP may cut rates by another 25 bps as early as next quarter or in the second half to guard against possible economic risks from the virus outbreak.

The Monetary Board on Feb. 6 trimmed policy rates by 25 bps as a “preemptive move” to shield the economy from downside risks. This brought the rate on the BSP’s reverse repurchase, overnight deposit and lending facilities to 3.75%, 3.25% and 4.25%, respectively. — Luz Wendy T. Noble with Reuters

Wilcon allots P2.9B for this year’s spending

WILCON DEPOT, Inc. is earmarking P2.9 billion for its capital spending in 2020, which it will use to fund plans to open more stores, extend existing ones and upgrade old depots.

In a disclosure to the stock exchange Wednesday, the listed home improvement retailer said it is targeting to have a total of 65 stores by the end of the year, an increase from the 57 it had at the end of 2019. The budget would cover the construction of around eight to nine new depots.

It also reported a 15.8% growth in net income to P2.13 billion for the full year 2019, fueled by the expansion of its store network nationwide.

The growth was backed by a 16.3% growth in net sales to P24.48 billion, cushioning the 12.9% increase in cost of sales to P16.3 billion. Comparable sales growth for the full year was 5.2%.

Depots accounted for 95.9% of Wilcon’s sales in 2019 at P23.47 billion, an increase of 16.5% from a year ago. The company was able to open six new depots last year, which contributed P2.33 billion or 67.9% of the total rise in net sales.

The same store sales growth of depots — or sales from Wilcon’s existing depots — stood at 5% in 2019. The company ended the year with 50 depot branches across the country.

Wilcon’s smaller format store, Home Essentials, added 2.7% or P658 million of the total net sales last year. This is an increase of 6.2% from the level in 2018, coming from a portfolio of seven branches that had a same store sales growth of 4%.

The remaining 1.4% of net sales came from project sales, which contributed P349 million or a 18.6% rise from in 2018.

“Wilcon’s effective implementation of its product mix strategy continued to drive margin expansion. Exclusives’ (in-house and exclusive brands) contribution to net sales increased to 49.5% for the year driving the expansion in the blended gross profit margin to 33.4%,” it said.

Operating expenses recorded a three-year high of P5.4 billion, 22.1% up from the figure in 2018, due to the implementation of a new accounting policy, the expansion of its store network, and an adjustment in statutory wage.

Total capital spending last year clocked in at P2.65 billion, which went to the opening of new stores and warehouses, the extension and renovation of existing stores, and investments in computer software.

“We are pleased with our full year 2019 results,” Wilcon President and Chief Executive Officer Lorraine Belo-Cincochan said in a statement. “These results certainly will encourage us more to continue in our strategic direction and give us assurance that we can deliver consistent growth in the coming years.”

The company is looking at a mid-teen topline and bottomline for 2020 and a 5-6% comparable sales growth.

Shares in Wilcon at the stock exchange closed P18.50 each on Wednesday, down 16 centavos or 0.86%. — Denise A. Valdez

Google Philippines launches online safety campaign

By Zsarlene B. Chua
Senior Reporter

GOOGLE Philippines has launched a campaign creating a teaching module for high school students nationwide in order to “deepen its ongoing commitment to online safety and responsibility,” according to a press release.

The campaign called Cyberpeace: Creating a Peaceful Internet Together has Google partnering with Teach Peace Build Peace Movement, a non-government organization that runs a peace education program for children in conflict and non-conflict zones, along with volunteers and YouTube creators in implementing the company’s Be Internet Awesome curriculum to high school students in private and public schools nationwide.

“Google is not just about creating the most awesome and magical products. We feel that we have a bigger responsibility than that and that includes our responsibility to create a safe and peaceful environment for everyone,” said Bernadette Nacario, country director, Google Philippines said during the launch on Feb. 11 at the Google offices in Bonifacio Global City, Taguig.

The curriculum aims to educate at least 10,000 high school students nationwide through 2020 on how to use the internet in a more responsible and safer way.

The module will focus on five core concepts and values: online reputation, critical thinking to fight scams and misinformation, privacy and security, cyberbullying, and reporting inappropriate online behaviors. The initiative will also tackle other relevant issues such as “catfishing” and cancel culture.

Catfishing is a deceptive activity where a person fakes an identity online targeting people for fraud or abuse while cancel culture is a phenomenon where people online boycott an individual (usually a celebrity) for alleged wrongdoings, problematic behavior, or unpopular opinions.

Citing Google’s Digital Wellbeing of Families report, Ms. Nacario said 71% of Filipino households rely on digital technology to connect with their families at least once a day. This makes the Philippines the highest among the 11 countries surveyed. At second place is Indonesia at 66%. While 85% of Filipino parents said they worry about their child being exposed to inappropriate content online, second only to Brazil at 94%.

The Digital Wellbeing of Families was conducted in the Philippines in April 2019 with 1,000 households participating. Google also surveyed the US, Brazil, Mexico, Germany, Russia, Japan, Korea, Japan, Thailand, and Indonesia.

“At Google, we believe kids and the youth should be able to experience the best of technology — and that parents should be able to feel confident letting them explore online,” Ms. Nacario said.

“Through the Cyberpeace campaign, we hope not to only help Filipino families stay safer online but provide a springboard for a shared, nationwide commitment to a more peaceful internet, at the heart of a vibrant digital economy for all Filipinos,” she added.

Aside from the pilot class in San Francisco High School in Quezon City, the modules will also be taught in select public and private schools in the country including Batasan Hills Nation High School in Quezon City, Abellana High School in Cebu City, and Marawi City National High School.

Whiskey from Tibet and organic Champagne among best new booze

By Elin McCoy, Bloomberg

EVERYONE loves Paris — even in February, when the City of Light is cold and gray, right?

That was the thinking behind holding this year’s VinExpo wine and spirits trade fair in Paris for the first time. Since 1981, the fair’s biannual home has been Bordeaux, but despite lavish chateau parties with fireworks, that version was losing market share to the no-nonsense annual German trade show, ProWein.

“Our goal in Paris,” says new VinExpo Chief Executive Rodolphe Lameyse, “is to be the game changer — and the No. 1 wine and spirits marketplace in the world.”

This year’s three-day schmoozefest blended VinExpo with Wine Paris, another international exhibition, and drew some 30,000 international buyers to do deals, discover the latest trends, explore what’s new from 2,800 exhibitors from 20 countries, and delve into the topic of sustainability and climate change at Moët Hennessy’s three-day forum (more on that in a future column).

Hanging over all of this, though, were the specters of Brexit, the continuing US tariffs, and China’s slowdown, which prompted French Minister of Agriculture Didier Guillaume to open the fair by stating that France has to find new markets in other countries.

I spent my days tracking down the newest of the new in three huge halls at the Paris-Versailles Exhibition Center. Products ranged from the sublime to the silly, including such items as the world’s first wine vinified underwater.

What struck me most was the popularity of the huge spirits area, where dozens of buyers hung out at a 165-foot-long bar, sipping exotic drinks stirred up by Paris’s top mixologists. New gins were ubiquitous and unusual, with regional flavors predominating. One Peruvian example incorporated sacha inchi (Inca chestnuts) and tonka beans from the Amazon rainforest, another from the UK was flavored with local gooseberries, and an Italian one included fresh tomatoes. Talk about upgrading your summer gin and tonic!

And, yes, there were parties, such as the dinner at Château de Versailles to celebrate the 70th anniversary of Bordeaux’s Commanderie du Bontemps. We walked through Louis XIV’s bedroom and under the sparkly chandeliers in the Hall of Mirrors to the 390-foot-long Gallery of Great Battles, where we ate truffled fillet of beef and drank magnums of Château Lafite-Rothschild while contemplating huge canvases replete with charging horses and clashing soldiers swinging swords — and, of course, the spoils of the fair.

Here are my six most exciting VinExpo/WineParis discoveries:

BEST NEW CHAMPAGNE
2016 Champagne Drappier Clarevallis, €46 ($49.69)

Organic wines continue to be a hot trend, so I was excited to try this new certified organic bubbly cuvée being launched by family owned Champagne house Drappier that will arrive in the US in May. It’s fresh, bright, chalky, and very, very dry, with an enticing golden color, scents of violets, and a creamy texture. Think of a superb white Burgundy with bubbles.

The blend of pinot noir, pinot meunier, chardonnay, and a bit of blanc vrai (pinot blanc) is the first fizz made by Drappier’s eighth generation — Charline, Hugo, and Antoine — all millennials.

BEST NEW SPIRIT
2006 Jiu Hai Bu Gan Sadhana, about €83

The biggest surprise was the world debut of this — get ready for it — vintage single malt from Tibet. Made with local barley and yeast grown at an elevation of nearly 10,000 feet and aged for nine years in special porcelain amphora, it was finished for six years in used American Bourbon casks and French oak barrels from Sauternes and Layon in the Loire Valley. It’s not like any whiskey you’ve tried. Amber-colored, with delicate floral aromas, it tastes very dry, pure, and soft, almost velvety in character. The barley comes from a Tibetan monastery, and three women distill it.

BEST NEW COCKTAIL INGREDIENT
Paragon Pepper Collection Cordials, €22 each

These exotic single botanical cordials from Nepal, Ethiopia, and Cameroon are based on different local peppers and reflect a current bartending obsession with unusual essences from remote places to liven up drinks.

My favorite was Timur Berry, which grows on small trees at elevations of 7,000 feet in Nepal. Fresh and citrusy, it smells and tastes of grapefruit. The powerful jasmine scents of Rue Berry, from Ethiopia, and the menthol-scented White Penja Pepper, from handpicked and fermented white peppers in Cameroon, wowed me, too.

Flavor syrup company Monin and award-winning London-based bartender Alex Kratena created them, using such new processes as “supercritical CO2 extraction,” which they claim reproduces a plant’s smell without altering it.

BEST NEW ORGANIC WINE
2017 Domaine Marcel Deiss Riquewihr, $40

Marcel Deiss, one of the top biodynamic domaines in Alsace, will launch this savory new white in the US in the spring. The earthy, seductive blend of pinot gris and riesling is part of a series of new village wines with medieval manuscript-like labels designed to reflect the “emotion” of the wine inside. Alsace lacks the official category of village wines that Burgundy has, and the Deiss family is trying to create one to promote Alsace’s different terroirs.

BEST NEW, INEXPENSIVE RED
2016 Marie Blanque Edition 1, $19

This brand new red wine from Famille Lesgourgues, three brothers who own an estate in Madiran in southwest France, is made from tannat, a grape known for super tannic, powerful wines that are often tempered by the addition of grapes such as cabernet franc. This 100% tannat cuvée is different — soft and fresh, with dark, juicy, intense flavors. It was inspired by the artist-brother’s memory of one he drank during a mountain picnic 20 years ago.

BEST NEW LUXURY WINE ACCESSORY
Baccarat Passion Champagne decanter, $960

On L’Avenue, a posh-looking area designed as a Parisian street of luxury shops, Jean-Charles Boisset, a flamboyant impresario of California and French wines, was launching a lot of new items, but my eye was on the pricey new Passion Collection Champagne decanter he created, produced by Baccarat. You may be asking yourself why you need to decant Champagne. The idea — according to Boisset — is to add smoothness, release the wine’s aromas, and leave you with only the most elegant, tiny bubbles. At the very least, it’s a beautifully designed object to display in your home.

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