Santos Knight Frank releases The Wealth Report 2019

July 30, 2019 | 12:01 am

INVESTORS are bullish on the Philippines and its property market as it is seen as a safe haven amid geopolitical and economic challenges in other parts of the world, according to Santos Knight Frank Chairman & CEO Rick Santos.

Santos Knight Frank recently launched in the Philippines The Wealth Report 2019, the flagship publication of the company’s global partner.

According to The Wealth Report, Manila outperformed 99 other markets on the Prime International Residential Index with 11% growth in prices last year.

Knight Frank’s commercial real estate research noted Manila has a competitive edge in office lease rates across Asia Pacific, having one of the lowest gross effective rents during the early part of this year.

Trump’s debt binge puts Treasury auctions on path to fresh highs

July 30, 2019 | 12:01 am

THE US TREASURY Department is expected to hold its quarterly note and bond sales at record levels for the third straight time as Washington’s latest budget deal shows that the US’ debt binge will continue.

President Donald Trump once said he would eliminate the national debt, but now he’s set to approve a budget that will help usher in trillion-dollar annual deficits. In part because of that, Wall Street securities firms predict that a boost in Treasury issuance may be coming in a year’s time.

Bond dealers see the status quo prevailing at Wednesday’s quarterly refunding announcement. Forecasts are coalescing around the view that the Treasury will keep auction sizes of 3-, 10- and 30-year debt unchanged at a record total of $84 billion, in sales scheduled from Aug. 6-8. To put it in perspective, the tally was $62 billion at the time of the 2016 US election.

But there’s general agreement among analysts that the plateau in issuance can last only so long. The bipartisan deal to suspend the debt limit for two years also paves the way for a $324 billion increase in government spending over the period above existing budget caps. That’s emboldening most dealers to pencil in increases in debt sales by fiscal 2021, which starts in October 2020.

“The deficit is rising and the impetus toward higher spending is very strong,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “By the second half of next year Treasury will have to raise coupon sizes again.”

With the president shoving aside past Republican orthodoxy on fiscal restraint and the issue not prominent among Democrats campaigning to take his job, Washington is showing no signs of slowing spending.

The House passed the debt-ceiling expansion and budget bill on July 25 and Senate Majority Leader Mitch McConnell said he expects his chamber to clear it this week for Trump’s signature.

NO CUTS
Ahead of Wednesday’s refunding announcement, the Treasury will unveil its quarterly borrowing projections at 3 p.m. New York time Monday.

Three months ago, some dealers saw the possibility that the Treasury could temporarily cut note and bond sales this year, amid the Federal Reserve’s plans to halt the run-off of debt from its portfolio and the Treasury’s push to boost bill issuance. The more the Fed reinvests its debt instead of letting it run off, the less the Treasury has to borrow from the public.

But the prospect of an imminent reprieve in long-term debt issuance dimmed in May after the Treasury and its borrowing committee of investors and dealers signaled that it wasn’t ideal to make temporary changes in coupon sizes. The committee indicated that shifting issuance too far toward bills could add “rollover risk.” That message upended prospects for coupon cuts, said Mark Cabana, head of US rate strategy at Bank of America Corp.

MORE TIPS
Dealers do expect the government to keep boosting auctions of Treasury Inflation-Protected Securities (TIPS).

Net Treasury issuance to the public will amount to $1.2 trillion in 2019, according to JPMorgan Chase & Co. That follows a net $1.34 trillion sold last year, more than double the 2017 level.

Dealers predict bill sales will pick up in the coming weeks as the Treasury replenishes its cash balance, which it trimmed to stay under the debt limit. The Treasury will sell about $220 billion of bills through Sept. 15, according to Blake Gwinn at NatWest Markets.

“The coupon sizes Treasury currently has in place still make sense, as they have room to largely make needed changes with bills or through the already-announced increases to come in TIPS,” said Praveen Korapaty, chief global rates strategist at Goldman Sachs Group Inc.

The debt-limit and spending bill, along with forecasts for economic growth and interest costs, put the deficit on course to surpass $1 trillion by fiscal 2021, so Treasury will need to boost note and bond sales, according to Bank of America.

Even amid healthy economic growth, the deficit for this fiscal year widened to $747 billion in the first nine months, 23% higher than the same period a year earlier.

The fiscal shortfall has continued to rise under Trump as tax cuts, bipartisan spending increases and entitlements weigh on the budget outlook. And candidates for the 2020 presidential election are trying to attract voters with proposals that would only increase the gap.

What’s clear is the backdrop puts the $15.9 trillion Treasury market on course to balloon in the next couple of years.

“By 2021, Treasury will begin to have a problem, given deficit growth, and need to increase coupon sizes,” said Margaret Kerins, global head of fixed-income strategy at BMO Capital Markets. — Bloomberg

Deep, divergent, delightful

July 30, 2019 | 12:01 am

Dragon Star Varnir
PlayStation 4

DRAGON STAR VARNIR is far from a typical Japanese role-playing game. In fact, it’s anything but run of the mill, eschewing the notion that demand for releases in the genre is fueled by entertaining gameplay and not depth of narrative. For Compile Heart, in particular, it represents a striking departure from the norm; instead of going for yet another Hyperdimension Neptunia offering that would have been gobbled up by a solid base of loyal fans, anyway, the Tokyo-based developer saw fit to churn out an entirely original intellectual property that calls to mind the dark and gruesome undertones of the early works of the Brothers Grimm.

Dragon Star Varnir harks to a time when dragons populate the world of Valneria. Tasked to ensure humanity’s existence, soldiers of the Knights of Requiem, main character Zephy included, mount a defense that likewise compels them to hunt witches. The latter literally and figuratively carry a chilling curse: They’re vessels for the legendary creatures, whose meat they need to feed on to survive, but which also nourishes those in their wombs. Thusly, they face a dilemma that ensures death either way; they go mad if they don’t eat, but perish from the inevitable birthing process if they do.

Duty and self-preservation make Zephy oblivious to the plight of witches — until, that is, he is one day saved by two. An encounter with a dragon in a remote forest has him at death’s door, but Minessa and Karikaro, initially viewing him as trade bait for a friend held hostage by the Knights, save him by having him drink dragon’s blood. The process unleashes the magic within him and turns him into a witch, which means he, too, is forced to move forth with the cross all his former enemies bear. And as he struggles to cope with the imprecation while being a fugitive as well, he finds himself understanding more and more the plight of his adopted kind, and the need to free it of its twisted fate.

Creditably, Dragon Star Varnir unfolds the immersive story with painstaking care. Zephy doesn’t turn into an ally overnight; even as he acknowledges that he owes his life to Minessa and Karikaro, escape is what first fills his mind. Eventually, his distrust gives way to acceptance, and then to willingness. And, in this light, the engaging interface serves to reciprocate the overarching narrative. Among the most prominent is the “madness” feature, which plays into the party’s predicament; the meter is filled not just as an offshoot of outcomes of skirmishes, but even in the way otherwise-ordinary conversations turn. In other words, character growth and relationship building are just as important as victories on the battlefield.

Which is not to say combat has been relegated to the side in Dragon Star Varnir. To the contrary, it’s critical to success, and certainly to appreciating its uniqueness as a JRPG. Fights occur in the air, and over three different heights; the layering allows gamers to plan their turn-based moves in such a way as to indirectly affect other targets across the grids. Meanwhile, the “devour” mechanic introduces a crucial quirk while also enhancing the plot: Enemies low on health can be consumed, with the imbibed “core” then awarding skill unlocks or stat buffs via factor points earned in triumph. Needless to say, the system incentivizes gamers to eat every dragon they encounter in order to level up characters.

Parenthetically, Dragon Star Varnir encourages equipment upgrades. The completion of quests and opening of treasure chests inside dungeons can provide new recipes for elixirs that can be used to summon dragons yielding specific items after battle. Because the materials required to make the preparations need to be sourced from various locations, however, gamers will have to weigh the importance of the articles against the time limit. Thankfully, the more persistent can earn or purchase “catalysts” that increase the chances of possession of the target gear.

Aesthetically, Dragon Star Varnir offers much of the same anime art style present in most other titles published by Idea Factory. Moreover, it boasts of music tracks and voiceovers typical of JRPGs: competent, catchy, and appropriately enveloping, but not quite memorable. That said, it’s representative of Compile Heart’s excellent body of work, not to mention a collectively skillful exhibition of a distinctive storyline. It manages to show the right tonal changes to convey the game’s progression from brooding to resigned to hopeful to jubilant.

In sum, Dragon Star Varnir flourishes as a decidedly idiosyncratic JRPG. For all its dedication to fanservice, it stands out as a refreshing addition to a seemingly saturated category. It’s deep, divergent, and ultimately delightful, making it a bargain at $60.

THE GOOD:

• Engrossing storyline

• Provides a bevy of customization options

• Unique combat mechanics

THE BAD:

• Completionists will run afoul of the time limit

• Uneven challenges

• Look and feel par for the RPG course

RATING: 8.5/10

PostScript: Songbird Symphony is just what its title suggests: a rhythm game involving a bird in search of harmony in life. Specifically, it follows the exploits of Birb as he searches for his real parents after learning that he isn’t really a peacock like the couple that raised him. An owl promises to help him in his quest, but only after he manages to compile music associated with the breeds of birds he meets along the way.

And therein lies the rub; Joysteak Studios’ initial foray in the business is likewise a platformer, with puzzles to solve and tasks to perform and complete via the formation of tunes from learned notes.

Songbird Symphony’s rhythm sections work like countless other games of similar nature, but with extreme variety; notes will come from any which way and exhibit movement with distinct patterns. Moreover, the speed with which they move through the screen can be exceedingly fast — sometimes too fast for comfort. That said, the game is on the forgiving side, and no death will occur; gamers simply need to keep playing until they get the green light to progress. Which, in light of the generous scoring system, figures to come sooner rather than later.

Songbird Symphony is far from perfect. The puzzles increase in complexity over time, and their completion sometimes requires the performance of other tasks that aren’t quite clearly connected. Moreover, character models are liberally recycled, giving off a been-there-and-done-that vibe on occasion. On the whole, though, it manages to separate itself from the dregs with its strong animation, colorful pixel-art visuals, and excellent audio tracks. Clocking in at around five hours all told, it looks to keep gamers occupied for a light afternoon of fun wrapped in a heartwarming story. (8/10)

And finally: The release of Legend of Heroes: Trails of Cold Steel III has been moved back a month to Oct. 22. Even as a demo of the game will be out soon, NIS America opted to delay the title’s availability “to guarantee as successful a launch window as possible.” The company had earlier drawn flak for what a number of quarters deemed a mediocre localization of Ys VIII: Lacrimosa of Dana, also a Nihon Falcom title.

Phoenix to raise P3.2B from commercial papers

July 30, 2019 | 12:01 am

PHOENIX Petroleum Philippines, Inc. said on Monday that the second series of its P10-billion commercial papers program (CP Series B) is to be issued at a discount to face value of 7% per annum.

The Davao City-based company said the net proceeds of the issuance, assuming the offer is fully subscribed, would be approximately P3,231,842,905. The aggregate principal amount of CP Series B is P3.5 billion.

Phoenix Petroleum, one of the companies that significantly expanded its business in recent years, said it would use the proceeds primarily to refinance existing short-term loans. The loans were used to finance working capital requirements for the regular importation of fuels and lubricants.

In March, the listed oil company disclosed that it had signed a memorandum of understanding (MoU) with Philippine National Oil Co. (PNOC), along with China’s CNOOC Gas and Power Group Co. Ltd. (CNOOC G&P), to jointly explore business opportunities in a liquefied natural gas (LNG) hub project.

Phoenix Petroleum had said the MoU was signed on Feb. 28 in the presence of Secretary Alfonso G. Cusi, who also chairs PNOC, at the Department of Energy office.

The MoU signing, which came after a series of engagement talks among the three parties, will allow them to explore and discuss business opportunities and cooperation in relation to the equity investment in Tanglawan Philippine LNG, Inc., the project entity for the LNG project.

On Monday, shares in Phoenix Petroleum slipped by 0.17% to close at P11.96 each.

Phoenix Petroleum earlier this month sought the consent of the holders of its P1.375-billion fixed rate notes to adopt certain amendments to the trust agreement between the company and China Banking Corp.

The proposed amendment seeks to provide the company with the flexibility to pursue and capture growth opportunities that will further strengthen its position as the country’s leading independent oil company, it previously said. — Victor V. Saulon

How ‘smart and sustainable’ is Manila compared to other cities?

July 30, 2019 | 12:00 am

How PSEi member stocks performed — July 29, 2019

July 30, 2019 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Monday, July 29, 2019.

Big oil firms back fuel marking, citing need to curb smuggling

July 29, 2019 | 10:46 pm

THE Philippine Institute of Petroleum (PIP) said its members, which include the country’s biggest oil companies, support the government’s fuel marking program as a means of curbing smuggling.

“As early as last year, our members have been working closely with the Department of Finance (DoF) to ensure the program’s proper and effective implementation. We support the government’s efforts to curb smuggling which continues to undermine the industry and the government in general,” PIP said in a statement Monday.

Fuel marking involves the use of dyes blended into the fuel, to mark the stages undergone by a particular batch of product. The absence of the marker will be taken by the authorities as prima facie evidence that a shipment of fuel is not tax-compliant.

PIP’s members include Chevron Philippines, Inc., Isla LPG Corp., Petron Corp., Pilipinas Shell Petroleum Corp., PTT Philippines Corp., and Total Philippines Corp.

The group said the DoF consulted in June PIP member-companies on the draft implementing rules and regulations (IRR) of the program. It said initial visits to their facilities were conducted by the department, along with implementing bodies like the Bureau of Customs and Bureau of Internal Revenue, and the fuel marking provider.

“From the formulation of the IRR to the issuance of the implementing guidelines to conducting tests and visits to the facilities of PIP members, we have been generously lending our time and expertise as a unified body fighting the same fight,” the group said.

It said before the passage of Republic Act No. 10963 or Tax Reform for Acceleration and Inclusion (TRAIN), around P40 billion in government revenue was being lost as a result of petroleum smuggling. It said the findings were validated by various independent studies.

The group said it believes that fuel marking will address the shortfall in revenue collection “provided that it is done on a level playing field.” It added that the program has to be implemented across all industry players in order for it to be fully effective.

“The success of this program would mean a significant increase in tax collection and the opportunity to utilize these for much-needed social services and infrastructure. Consumers would also be assured of the quality of fuels in the market coming only from reputable sources,” PIP said. — Victor V. Saulon

Rice import duties on track to fund RCEF, BoC says

July 29, 2019 | 10:45 pm

THE BUREAU OF CUSTOMS (BoC) said it has collected tariffs worth nearly P6.5 billion as of mid-July on rice imports since the Rice Tariffication Law went into effect in March, with the monthly average of P1.4 billion on track to fund the P10-billion-a-year Rice Competitiveness Enhancement Fund (RCEF).

In a statement Monday, the BoC said it is “on course” to meet RCEF funding requirements, which will allow the fund to support farm mechanization, seed and fertilizer acquisition and make credit more readily available.

The Rice Tariffication Law permitted more liberal imports of rice by private entities, who had to pay an import tariff of 35% on foreign grain sourced from Southeast Asia. It replaced the system of largely government-to-government rice orders overseen by the National Food Authority (NFA), which has been relegated to procuring rice from domestic farmers.

“At an average of P1.4 billion a month, the BoC remains on course to collect the minimum of P10 billion needed for the RCEF per year,” the BoC said.

The BoC reported to its parent agency, the Department of Finance, that it took in P6.479 billion from importer-traders as of July 15. It also raised a further P3.103 billion from the tax on import permits issued by the National Food Authority (NFA) since January.

The Port of Subic collected P1.598 billion worth of rice duties, followed by the Manila International Container Port (MICP) with P1.033 billion collections, and the Port of Manila with P998.77 million.

Economic managers have estimated that the law will reduce the price of the staple by at least P7 per kilo. — Beatrice M. Laforga

Iloilo province plans to become MICE destination

July 29, 2019 | 10:45 pm

By Emme Rose S. Santiagudo
Correspondent

ILOILO CITY — Government agencies, the private sector, and local government units (LGUs) in Iloilo province have completed a three-year plan to become a major meetings, incentives, conferences/conventions and exhibitions (MICE).

The campaign, with a P50-million budget, will carry the tagline “Meet you in Iloilo” in a bid to promote the area as “your next MICE Destination.” The campaign is due to be launched on Oct. 10.

Tourism Undersecretary Arturo P. Boncato Jr. said the first two years of the MICE tourism marketing plan include promotions focusing more on domestic conventions, in preparation for bigger international conventions.

“What this program is doing is rationalizing all resources, setting up one major direction for everybody, where part of the direction is improvement along the way, facilities-wise, service wise, marketing and promotions-wise,” Mr. Boncato said Friday during a presentation to Iloilo provincial officials.

Mr. Boncato noted that the Iloilo Convention Center (ICC) accommodated 79,198 MICE participants in the first half of the year, more than double the 36,500 full-year total in 2017.

“We hosted the Asia-Pacific Economic Cooperation (APEC) and Association of Southeast Asian Nations (ASEAN). It’s an achievement. We achieved a certain standard. All of the meetings that transpired in Iloilo met a global standard,” he said.

Aside from the marketing plan, an Iloilo MICE Alliance Core Group composed of representatives from various tourism sectors was formed earlier this year to develop promotions, incentives, and related tourism packages.

Cleofe C. Albiso, general manager of Courtyard by Marriott Iloilo, said available incentives based on the number of MICE participants include a 5% discount on accommodations for the first night and an additional 5% for succeeding nights.

The ICC, meanwhile, will give a 10% discount and no ingress charge to a MICE event occupying the entire Convention Hall.

Ms. Albiso added that MICE participants will be able to avail of discounts and other incentives from participating restaurants, transport service, tour operators, and airlines.

“We have put our personal interests and corporate goals aside to collaborate to make this happen. We have to do this because if we do not work together, we can never move forward. We are not here to represent our brands because we know our businesses will fly once we really make this happen,” she said.

Mr. Boncato said the program details will be ironed out and ready in time for the launch.

“We will have a set of packages to attract more (events)…. The ICC is the golden hen, that’s why it is important that (stakeholders) support the biggest meeting facility in Iloilo. It’s already there, Iloilo is already a MICE (destination),” he said.

India clears abaca shipments from PHL

July 29, 2019 | 10:44 pm

THE Philippines has been cleared to resume abaca fiber exports to India after New Delhi lifted an import ban, the Department of Agriculture’s (DA) fiber industry regulator said Monday.

“We are very happy to announce that the import ban on the Philippine abaca fibers by India due to the alleged Moko disease contamination in the abaca fibers has finally been resolved and lifted in less than a year of high-level bilateral meetings,” the Philippine Fiber Industry Development Authority (PhilFIDA) said in a social media post yesterday.

A letter from Rajesh Malik, director of the Ministry of Agriculture and Farmers Welfare of India, said its pest risk analysis failed to detect the bacterium Ralstonia Solanacearum Race-2, which causes Moko disease.

“The Ministry of Agriculture and Farmers Welfare avails itself of the opportunity to renew to the Embassy of the Philippines its highest consideration,” it read.

PhilFIDA Executive Director Kennedy T. Costales earlier said the trade of abaca between the Philippines and India is worth an average of 99.7 metric tons per year.

The trade was halted in October 2017 due to an Indian Plant Quarantine Order, which required that imported abaca fibers undergo a pest risk analysis.

In a statement earlier this month, Mr. Costales said there have been three bilateral meetings to discuss the issue.

“The abaca fiber is already a semi-processed/finished product extracted or stripped from the leaf sheaths of matured abaca stalks, then sun-dried, hanked, cleaned of its foreign matters, sorted, classified, tipcut, weighed, baled and stored ready for shipment. Moko disease will not survive these processes,” he said then.

Mr. Costales noted that as the world’s largest abaca fiber supplier, the Philippines views Indian claims that the shipments might harbor Moko disease as a threat to the industry, and as a result the DA requested that India conduct a new pest risk analysis. — Denise A. Valdez

SEC fines Abacus Coal P2M over ‘misstatements’ in audited results

July 29, 2019 | 10:43 pm

THE Securities and Exchange Commission (SEC) said it ordered Abacus Coal Exploration and Development Corp. (ACEDC) to pay a fine of P2 million “for the material deficiencies and material misstatements” in its 2008 and 2009 audited financial statements.

“The Appellant is hereby ordered to correct its 2008 and 2009 Audited Financial Statements to reflect the total misstatements of assets and equity amounting to P2.7 billion,” the SEC in an decision signed by its Chairman Emilio B. Aquino on July 16.

The SEC affirmed with modification the order of its Company Registration and Monitoring Department (CRMD) outlining the penalty. The fine amounts to P1 million for each year of misstatement pursuant to the Securities Regulation Code (SRC).

The CRMD order was issued on Jan. 19, 2011.

The SEC also directed CRMD “to investigate the misstatements carried forward to succeeding audited financial statements” and reserved the right “to impose additional penalties until such are corrected.”

The case stemmed from the execution on Sept. 23, 2008 of ACEDC’s parent firm Abacus Consolidated Resources and Holdings, Inc. (ACRHI) of a deed of assignment of coal mining rights with appraised value of P2.7 billion in exchange for P295 million worth of new shares issued by the coal company. The transaction’s intent was to gain further control of ACEDC.

On Nov. 13, 2008, ACEDC filed with the SEC an application to increase its authorized capital stock to P300 million from P20 million in a filing subsequently approved by the SEC on Dec. 24, 2008.

The issuance of P295 million worth of new shares was fully subscribed and paid for by ACRHI through the assignment of coal mining rights.

ACEDC filed its 2008 audited financial statements on May 7, 2009 and its 2009 audited financial statements on May 7, 2010. In both 2008 and 2009, the company did not record in its balance sheet the increased capital stock and the acquired coal mining rights. Instead, it disclosed the information in the notes to financial statements.

On Nov. 30, 2010, ACEDC received from the CRMD a notice of conference to show cause why it should not be penalized for material deficiencies and material misstatements in its 2008 and 2009 audited financial statements.

Despite the company’s explanation in the conference, the SEC unit directed ACEDC to settle the imposable fine for violation of SEC Memorandum Circular No. 8 Series of 2009. The company filed its appeal on Feb. 28, 2011.

However, the SEC said the subsequent disclosures made by ACEDC in its notes to financial statements “are incomplete/deficient not only for the missing amounts or values but also for failure to make a clear connection” to the deed of assignment of mining rights by ACRHI in exchange for the appellant’s shares of stock worth P295 million. — Victor V. Saulon

Captive services firm touts productivity gains from inclusiveness

July 29, 2019 | 10:42 pm

CAPITAL ONE Philippines, which provides captive services to its parent Capital One Financial Corp. (COFC), said it has found productivity to improve if the workplace promotes inclusiveness and diversity.

Capital One Philippines General Manager Peter Hayden told BusinessWorld in an e-mail interview that COFC’s captive center in the Philippines, said acknowledging worker individuality allows them to work to their potential.

“When associates are able to bring their whole selves to work — their different backgrounds, life experiences, and unique perspectives — everyone has a chance to thrive and realize their full potential. This enables ideas, approaches, and innovative solutions that reflect the interests and needs of our customers,” he said.

He said employees have an avenue known as Business Resource Groups (BRGs), which were “established as forums for employees to celebrate their shared culture, support each other and encourage continuous learning to meet business objectives,” he said.

Mr. Hayden also said work relationships improve when the company allows for flexible work time and periodic dialogue with management.

“We celebrate people. We see them with malasakit (compassion). We value our associates as much as we value our customers and communities,” he said.

COFC is a New York-listed bank and one of the largest credit card issuers in the US. — Gillian M. Cortez