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Banks paint ‘manageable’ Hanjin risk

FITCH SOLUTIONS Macro Research on Tuesday added its voice to expectations that debt woes of Hanjin Heavy Industries and Construction Philippines, Inc. (HHIC-Phil) will not likely shake the Philippines’ financial sector, as four of the affected local banks disclosed some details of their exposure to the troubled Korean shipbuilder.
The Bangko Sentral ng Pilipinas was cautious in its remarks after the disclosures, with Deputy Governor Chuchi G. Fonacier saying in a mobile phone message that “[i]f the creditor-bank is proactive in monitoring the developments in Hanjin, then the bank should have already provided for an allowance for credit losses… the bank would be able to cushion the impact of this default on its profit.”
In separate disclosures to the bourse on Tuesday, four of the country’s biggest lenders — BDO Unibank, Inc.; Metropolitan Bank & Trust Co. (Metrobank); Bank of the Philippine Islands (BPI) and Rizal Commercial Banking Corp. (RCBC) — gave a few details of their exposure to HHIC-Phil, saying they did not project significant negative impact on their operations.
An Olongapo City court on Monday gave the green light for HHIC-Phil’s rehabilitation proceedings to begin.
The shipbuilder’s debts to the four listed local banks as well as to state-owned Land Bank of the Philippines (LANDBANK) have been estimated to total some $412 million.
Financials were one of the four sectoral indices that ended Tuesday with gains despite losses earlier in morning trading. But the day’s outcome was mixed for the affected listed banks, with RCBC and Metrobank shares closing flat at P27.15 and P80 apiece, respectively; BPI climbing 2.07% to end P93.80 and BDO slipping by 0.53% to finish P130.90 each.
EXPOSURES
In its disclosure on Tuesday, RCBC said its exposure to HHIC-Phil totaled some $145 million — the biggest among the affected banks — involving four shipbuilding contracts.
That compares to RCBC’s P614-billion assets and P387-billion total net loans.
“The bank’s net NPL (nonperforming loan ratio) of 1.2% as of September 2018 will increase as a result of this exposure and corresponding provisions will be made based on accounting standards and regulatory guidelines,” RCBC said in its disclosure, noting that its P84-billion capital as of September last year put it “in a strong position to absorb these provisions.”
“Even with this default, the bank’s capital adequacy ratio of 17.3% as of September 2018, remains very strong, well above regulatory minimum and can still support medium-term loan growth.”
Metrobank, which is estimated to have the third-biggest exposure to HHIC-Phil at $70 million — after LANDBANK’s estimated $80 million — did not confirm the reported amount but said its “exposure is low relative to our total assets of P2.1 trillion”.
Hence, it said, “[w]e have adequate provisions and we do not see any significant impact on our operations.”
BDO, whose exposure to the troubled shipbuilder has been estimated to amount to $60 million, said in its disclosure that its “Hanjin exposure represents only 0.15%” of its total loan portfolio, hence, did “not expect the above-cited exposure to have a material effect on the bank’s business, operations and/or financial condition.”
BPI said its exposure to HHIC-Phil amounted to $52 million, and not $60 million as earlier reported, accounting for “approximately 0.2% of our total loan book”.
“We have partially provisioned for this and additional provisions in 2019 is manageable,” BPI said in its disclosure.
In a note published Monday, debt watcher Moody’s Investors Service said huge loan exposures to Hanjin could pull down credit ratings for the five Philippine banks concerned as this would translate to narrower bottom lines in order to absorb possible defaults. At the same time, Moody’s — which has a “Baa2” rating, a notch above the minimum investment grade, for the banks concerned, said it expects “the affected banks’ loss-absorbing buffers to remain robust”.
The central bank has estimated total Philippine bank exposure to HHIC-Phil to account for 0.24% of total gross loans in the banking system and 2.48% of foreign currency loans.
NOT A SYSTEMIC PROBLEM
Fitch Solutions, in a Jan. 14 commentary e-mailed to journalists on Tuesday, said “[t]he loan default by Hanjin is unlikely to materially impact the stability of the financial system in the Philippines”, partly since “Philippine banks, in general, boast healthy capital buffers and low nonperforming loans”.
Fitch Solutions — sister company of debt watcher Fitch Ratings — said it believes HHIC-Phil’s debt trouble “is not a systemic problem and is unlikely to threaten the financial stability of the country in the near term” even as it was “the biggest in the Philippines’ banking history.
It said it expects “little fallout for the banking system as a whole” since bank exposures were minimal compared to total assets, the affected lenders have agreed to work together to take control of the shipbuilder’s assets in the Philippines and the entire banking system, as a whole, boasts robust capital and liquidity buffers.
That said, Fitch Solutions said it expects Philippine banks’ operating environment to “become more challenging going forward”.
“… [W]e maintain our expectation for credit growth to slow and asset quality to weaken over the coming quarters, as the operating environment becomes more challenging due to slowing economic growth momentum and tightening monetary conditions,” Fitch Group’s research unit added.
HHIC-Phil has maintained a shipyard at the Subic Bay Freeport Zone in Central Luzon since 2006 and had hired over 22,000 workers. Issues on worker safety have also hounded the shipbuilding firm since it started operations here.
WORKERS’ WELFARE WATCHED
Also on Tuesday, Labor and Employment Secretary Silvestre H. Bello III said that his department will make sure that HHIC-Phil’s remaining 3,800 workers will get their separation benefits.
“We would like to assure the workers of Hanjin Heavy Industries that they will get separation benefits in accordance with the provisions of the Labor Code,” Mr. Bello said in a press conference. “Workers will get separation pay equivalent to one month salary per year of service.”
He added that the Labor department will provide re-employment assistance in jobs related to the workers’ skills, and will meet with the departments of Trade and Industry, of Public Works and Highways and of Transportation regarding the possible hiring of workers for government projects. — M. L. T. Lopez, K. A. N. Vidal and G. M. Cortez

Remittance growth slows in November

By Melissa Luz T. Lopez
Senior Reporter
MONEY SENT HOME by overseas Filipino workers (OFWs) grew in November last year, sustaining an increase for the third straight month and likely fueling household spending in 2018’s fourth quarter, according to data released on Tuesday by the Bangko Sentral ng Pilipinas (BSP).
Cash remittances totalled $2.326 billion that month, increasing by 2.8% from the $2.262 billion recorded in November 2017, even as it slipped from the $2.474 billion funds sent by OFWs in October, which recorded an 8.7% growth.
In a statement, the central bank said bigger remittances from workers based in Canada and the United States supported the year-on-year growth.
Cash transfers from OFWs support household spending and, in turn, overall economic growth.
Household spending has long been touted as the biggest driver of economic activity, but the pickup in consumption has softened in recent quarters just as surging inflation started to bite.
November inflows brought the year-to-date remittance tally to $26.094 billion, up 3.1% compared to the $25.318 billion recorded in 2017’s comparable 11 months.
This came on the back of bigger money transfers from land-based OFWs that went up by 2.8% to $20.5 billion, and a 4.1% increase in remittances from those at sea who wired $5.5 billion back home.
Filipinos in the United States continued to be the biggest sources of funds as of end-November, having sent $8.998 billion so far.
That was followed by cash transfers through banks by OFWs in Saudi Arabia ($2.033 billion), United Arab Emirates ($1.857 billion), Singapore ($1.662 billion) and Japan ($1.359 billion).
The BSP expects full-year remittances to log three percent higher than the $28.06 billion which the country received in 2017.
This translates to roughly $29 billion, which if realized would make 2018 another banner year.
Sought for comment, one analyst said the uptick in November remittances likely reflected early inflows ahead of the Christmas season.
“These are good numbers and were definitely driven by holiday spending,” said Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, Inc.
Remittances usually peak towards December each year as OFWs send more money to fund increased spending for festivities and gifts during the holidays. In turn, increased household spending is seen to bode well for the domestic economy.
“December numbers are expected to be supported by the same driver: Christmas consumption. These will most certainly be positive for Q4 GDP (gross domestic product) economic growth,” Mr. Asuncion added.
Philippine GDP grew 6.1% in the third quarter of 2018, marking the slowest climb in three years and keeping the nine-month pace at 6.3%, well below the state’s downward-revised target of 6.5-6.9%.
This came as private consumption eased to a 5.2% increase, eaten up by surging prices of basic goods and services.

FMIC, UA&P economists sketch better 2019 picture

THE PHILIPPINE ECONOMY should see better times in 2019, with growth seen picking up as prices and borrowing costs decline, analysts at First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said on Tuesday.
The analysts were bullish on prospects this year as they now see that the worst is over for inflation, which in turn would allow faster growth in household spending.
The investment banking unit of the Metrobank Group sees Philippine gross domestic product (GDP) growing faster at 6.8-7.2%, signalling a chance to hit the government’s 7-8% target. That compares to 2018 growth that averaged 6.3% in the first three quarters and 2017’s 6.7% pace. The Philippine Statistics Authority is scheduled to report fourth-quarter and full-year 2018 GDP data on Jan. 24.
“The Philippine economy is expected to rebound closer to seven percent as domestic demand continues to push it forward and will also be led by investments,” UA&P professor Victor A. Abola said during the FMIC media briefing in Taguig.
Central to the analysts’ forecast is the assumption that inflation will drop to 3-3.5% this year, versus 2018’s 5.2% average that was way past the central bank’s 2-4% target band.
Mr. Abola said inflation will sustain a slide that marked November and should fall below four percent this quarter and even clock in below three percent “by the third quarter.”
Supply shocks caused by higher food and world crude prices — which he said accounts for 95% of the inflation pickup in 2018 — have declined sharply and should now “normalize.”
A better inflation outlook would then spur consumption, which softened last year as prices ate into disposable incomes.
A sustained fiscal stimulus from the government’s infrastructure spending push, a recovery of the manufacturing, rising tourist arrivals and “hefty” spending related to the May 13 legislative and local mid-term elections should further boost overall economic growth this year, Mr. Abola said.
The analysts also expect some lift from exports, which they see growing by 4-8% this year coming from last year’s slump. On the other hand, imports will rise by 10-14%, thus maintaining a wide trade gap and pushing the peso to depreciate further to P54 against the dollar.
CAUTION ON HEADWINDS
On the flip side, possible delays in the rollout of big-ticket infrastructure projects, higher oil prices and “tight” market liquidity could dampen growth this year.
“One looming headwind is a very tight liquidity situation,” FMIC President Rabboni Francis B. Arjonillo said, noting that this condition could push borrowing rates higher and eventually put inflation on the rise anew.
Growth in money supply has slowed sharply in recent months, with November’s 8.4% down from 14.3% a year ago.
At the same time, FMIC expects the Bangko Sentral ng Pilipinas (BSP) to take steps to unleash more liquidity into the market. Senior Vice-President Christopher Ma. Carmelo Y. Salazar said he expects a reduction of at least 200 basis points (bp) in banks’ reserve requirement within the year starting in this quarter. FMIC said that a 100 bp cut in reserves would release over P90 billion which can be lent out or invested, and would then trim borrowing costs by about 7-8 bp.
This may even be followed by a 25 bp cut in the benchmark policy rate next semester amid “tame” inflation, Mr. Salazar added.
The BSP raised benchmark yields by 175 bp last year to temper surging inflation that peaked at a nine-year-high 6.7% in September and October.
Investor sentiment has greatly improved since then, with Mr. Salazar even seeing a 50 bp drop in market yields compared to yearend levels.
This year’s outlook also factors in slimmer chances of interest rate hikes in the United States alongside dimming global growth prospects. — Melissa Luz T. Lopez

Capital, equities markets to bounce back this year — FMIC

MORE initial public offerings are expected this year. — SANTIAGO JOSE J. ARNAIZ

By Victor V. Saulon, Sub-editor
AFTER their dismal showing last year, First Metro Investment Corp. (FMIC) expects the capital and equities markets to significantly improve in 2019, as it forecasts stronger economic growth and lower interest rates.
“With a better economic outlook, and more favorable financial environment in 2019, we expect capital raising to recover from the 25% slump in 2018 to expand this year by 51% to P824 billion,” Jose Pacifico E. Marcelo, FMIC’s senior executive vice-president, said during the firm’s annual economic and capital markets briefing at the Grand Hyatt in Taguig City on Tuesday.
FMIC forecasts the gross domestic product (GDP) this year to expand by 6.8% to 7.2% amid a strong macroeconomic fundamentals. It expects economic growth to be driven by an upturn in consumer spending partly as a result of an improving inflation outlook. The mid-term elections in May are also expected to provide an added boost.
“Fixed income issues, down 46% in 2018, is expected to almost double to P618 billion due to the expected quadrupling of bank bonds,” Mr. Marcelo said.
“For the equities market, volume is expected to ease slightly from the record P207 billion and 61% growth in 2018 to decline to P206 billion in 2019,” he added.
Initial public offerings (IPOs), however, will pick up this year after the deferred issues last year, and could boost the volume to P62 billion from P8 billion previously, he said.
“One silver lining is that the year 2018 ended with a positive momentum, which has been carried over to this year, so far, giving us reason to be cautiously optimistic for a much better 2019,” Mr. Marcelo said.
Cristina S. Ulang, FMIC vice-president and research head, said the equities market is coming from a sharp drop last year, alongside other emerging markets.
“For this year our view is very constructive,” she said, citing the country’s “very positive” macroeconomic picture. “We believe that the Philippines is still one of the solid growth stories in Asia.”
Ms. Ulang said the positive expectations include a recovery in consumer spending, election spending, and the country’s sustained fiscal stimulus.
“The growth of government spending is big. It’s 45% in infrastructure year-to-date November. In terms of capital outlay it’s about 35% year-to-date growth,” she said.
“And our deficit is targeted this year at 3.2%, slightly higher than the 3% of last year based on the DBM (Department of Budget and Management) fiscal program this year. And our infrastructure spending is also a bit higher — 5% this year of GDP coming from 4.9% of last year,” she said.
A recovery in manufacturing and tourism is also seen this year.
Ms. Ulang said the return of the foreign funds would be critical to the sustainability of the Philippine Stock Exchange index’s (PSEi) uptrend. So far this year, the index was already up by 7.5% to 8,024 on Monday, with foreign buying at $127 million.
A number of developments could drive the market even higher, including the liquidity situation. She said that after the tightness in liquidity, the improvement in the inflation rates could result in a potential easing of the government’s benchmark reserve ratios and policy rate.
“All of these will contribute to the easing of the liquidity situation and any liquidity improvement is positive for the equities market,” Ms. Ulang said.
She noted the “much awaited” pause in the US Federal Reserve’s policy rate hike cycle as well as the Bangko Sentral ng Pilipinas “potentially pausing” its rate increases in the first half could augurs well for equities market.
“And if we are going to believe what Trump has been saying all over that he is in the midst of a fantastic trade deal, then it’s going to be an additional tailwind for the Philippine market,” she said.
Ms. Ulang said the risks this year include higher-than-expected Philippine budget deficit, slowing global economy, potential risk of a recession in the US, escalating global trade war, large yuan depreciation and some geopolitical events, including a Brexit crash and the spread of populism in Europe.

Roxas Holdings reports lower profit in 2018

ROXAS Holdings, Inc. (RHI) reported its attributable net income dropped 60% in 2018, as gross income fell and interest expenses increased.
In a regulatory filing, RHI said its net income attributable to the parent stood at P47.66 million for its fiscal year ending Sept. 30, 2018, lower than the P119.77 million in the prior year.
Consolidated gross income slipped 11% to P1.25 billion, which the company attributed to “sugar operations higher manufacturing costs resulting from decreased production volume due to decreased ton canes milled and factory breakdowns.”
RHI saw an 8% rise in consolidated revenues to P11.81 billion for the full year, due to higher average selling prices and sales volume of refined sugar.
Sugar operations contributed P8.56 billion or 73% of total revenues. The 30% rise in refined sugar sales volume offset a 3% dip in raw sugar sales volume in 2018.
Revenues from alcohol operations fell by 10% to P3.24 billion, amid a drop in volume sold and average selling prices.
RHI said its interest expense rose 13% to P502.1 million as the company availed of short-term loans amid higher interest rates in 2018.
At the same time, RHI said the proposed sale of its sugar milling and refining operations in Batangas to Universal Robina Corp. (URC) has yet to be completed, since the deal is under review by the Philippine Competition Commission (PCC).
Last July, Gokongwei-led URC said it will acquire all buildings, improvements, machineries and equipment, and laboratory equipment, owned by RHI and its subsidiary Central Azucarera Don Pedro, Inc. (CADPI), as well as the land on which these assets are located.
RHI, which is described as the largest integrated sugar business in the country, manages sugar miller Central Azucarera de la Carlota, Inc., ethanol producers Roxol Bioenergy Corp. and San Carlos Bioenergy; and RHI Agri-business Development Corp.

Charot isn’t joking

FILIPINO slang that means “just kidding,” the word “charot” is conveniently used to lighten things up and make them fun with the aim of reducing serious discussions into jokes. But PETA’s new political show Charot will take matters seriously.

Charot is about an upcoming national election and tackles the move towards Federalism with additional layers about our Filipino-ness and our psyche added to the story for more texture and social context.
It is the final show of the group’s 51st season which has the theme “Stage of the Nation.”
Written by young writers Michelle Ngu and J-Mee Katanyag, Charot is an imagined Philippine society set in 2020 where there’s an impending constitutional change and an ongoing national election. A group of people — two millennial lovers, a Tita of Manila, a vendor, a police officer, and a couple of proletariats — find themselves stuck in a traffic thanks to a flood after a heavy downpour. All of them were going to a precinct to vote at the last minute, and in the process maybe change the course of history: whether the Philippines will be a federal country or not is in their hands.
“It will tackle the two sides of Federalism, but more than that, mas mahalagang makilahok at bantayan ang boto sa eleksyon (it is more important to participate and monitor the vote in the elections),” said Ms. Ngu.
Her co-writer, Ms. Katanyag, added that while Charot will tackle constitutional change, it will also analyze how democracy works and how Filipinos use it or take it for granted.
“More than taking a hit at the administration, it’s taking a hit at someone, sino ka man: tita ka, vendor ka, millennial ka, endo-han ka na worker (whoever you are: a middle-aged middle-class woman, a vendor, a millennial, a short-term contract worker). It’s asking the questions: How do you live out your democracy? What are your choices every day?,” said Ms. Katanyag.
POLITICAL SHOW
While the script already has a backbone, it’s still evolving as Congress is still discussing provisions and other matters involved in the proposed change in the country’s form of government to federalism.
“It’s very challenging because we’ve been educating ourselves also. We cannot write [about] something we don’t understand, right? Honestly, we went through a lot of story concepts. Before, Charot would be a fantasy, may mga aswang (there were shapeshifting evil spirits) and then we figured out why not play on characters of ordinary people of the mundane? Kasi mayron din namang aswang sa totoong buhay (because there are aswang in real life),” Ms. Ngu told BusinessWorld at the sidelines of a press conference at the PETA Theater Center in Quezon City on Jan. 9.

Charot will be staged at the PETA Theater from Feb. 8 until March 17, a few days before the upcoming general elections in May.
It is a PETA tradition to produce political shows prior to elections, like Boto ni Botong.
PETA’s artistic director and Charot director Maribel Legarda told BusinessWorld that the musical has two goals: to educate the audience about Federalism, and to inspire people to use their right of suffrage.
The challenge, she said, is in making an original Filipino play that tackles heavy issues without making it boring.
She said: “More than directing it on stage, mas mahirap talaga [what is harder] is creating a text. How do you tell stories of our conflicts now, with different personalities? Finding the story telling. It’s not Czechov or Shakespeare. We have one objective: we have a bunch of people whose objective is to be able to vote. Where’s the drama there? So finding that drama, we can explore and show kung ano ba ang Pinoy [what is the Filipino]. It’s objective is to educate what Federalism is, paano mo ngayon ipapasok itong information [how to include this information in the play] but still making it creative and interesting? Maraming [There are many] challenges at all levels.”
VOTE FOR THE ENDING
One way of keeping things interesting is getting the audience involved — Charot will be an interactive play that will deconstruct traditional idea of theater viewing. Even before the play starts, there will be interactions, and a debriefing with the audience will also happen after the show.
A few scenes before the play ends, the audience will be asked a question and will be asked to vote online via their phones. Their votes will change the course of the story as the play has two possible endings, depending on whether the voters are for or against the idea of the Philippines becoming a federal country.
“The cast wouldn’t know what will happen during the show because the ending will depend on the audience’s choice,” said Charot’s writers.
But then again, when something is political in nature, it can’t just stay neutral, right? Will PETA’s Charot take a stand? Will it be for or against Federalism?
“No, you can’t be neutral — in the end that you have to choose as an individual. What we’re trying to say is that there’s a lack of information. It has nothing to do with the name of the person [who is] our leader [in] a particular given time. We’ve always been critical of our government and society. Artists have that goal, to be critical…. with the president right now, therefore we are being critical in the same way that we’ve been critical of GMA, Erap, Marcos. Ang feeling namin, dapat siyang kuwestiyunin, dapat siyang magkaron ng diskurso sa mga nangyayari sa society natin (We feel that he should be questioned, there should be a discourse about what is happening in our society), and the only way you can create your own power is to get educated, even if it’s not in politics. Ignorance is always your worst enemy, but when you find out what it is, first nawawala ’yung fear mo and then nakakagawa ka ng choice (first you lose your fear, then you can make a choice). At the end of that day, that’s neutral,” said Ms. Legarda.
Nothing is neutral, she said. Thanks to their study of Federalism, PETA cast members and artistic team have become more informed and critical about the proposed constitutional change.
Ms. Legarda said: “In principle, Federalism a good thing, but the problem is, is now a good time given the condition of our politics: political dynasties, corruption, the amount of money it would cost? Should we do it now? This is generational in effect so we should care. Later on down the line, kung mas maayos ang government [when the government is better] and when we’re ready, then why not. But not now, we’re not yet ready, therefore [there’s Charot].” — Nickky Faustine P. de Guzman

NLEx Harbor Link Segment 10 to open this month

THE Department of Public Works and Highways (DPWH) said the North Luzon Expressway (NLEx) Harbor Link Segment 10 is finally set to open this month.
“We are happy to announce that the NLEx Harbor Link Project will be accessible to the public by January. When this is completed, travel time from C3 in Caloocan and NLEx, will be reduced to 10 minutes,” DPWH Secretary Mark A. Villar said in a statement on Tuesday.
The project was originally scheduled for completion in December after the DPWH delivered 100% right-of-way on the toll road’s main line in October.
Harbor Link Segment 10 is an expressway project by the government’s private concessionaire NLEX Corp., which aims to connect Karuhatan in Valenzuela City to C3 road in Caloocan City, with a spur road to Radial Road 10 (R-10) in Navotas City.
About 30,000 cars a day are expected to benefit from the toll road once it opens, a bulk of which are trucks coming from the port area.
NLEX Corp. is part of Metro Pacific Tollways Corp., the tollways unit of Metro Pacific Investments Corp. (MPIC).
MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

Archaeologists restore ancient Palmyra artifacts

DAMASCUS — In the National Museum of Damascus, archaeologist Muntajab Youssef works on an ancient stone bust from Palmyra, one of hundreds of artifacts his team is painstakingly restoring after they were damaged by Islamic State.
Centuries-old statues and sculptures were wrecked by the jihadists when they twice seized control of the old city in central Syria during the country’s war, which will go into its ninth year in March.
The 1,800-year-old bust of a bejeweled and richly clothed woman, The Beauty of Palmyra, was damaged during the first offensive on the city by Islamic State fighters in 2015.
After Syrian government forces took back the city with Russian military support in March 2016, the bust, alongside other damaged ancient monuments, was taken to Damascus and archived in boxes. When restoration work on it began last year, Mr. Youssef said it was in pieces.
“The hands and face were lost completely, also parts of the dress and there are areas that are weaker,” Mr. Youssef, who has been working on the bust for two months, said.
Mr. Youssef is one of 12 archaeologists working on the arduous restoration job, which first began with the moving of the damaged pieces to Damascus.
Mamoun Abdulkarim, the former Head of Syrian Antiquities, said that in some cases broken artifacts were transported in empty ammunition boxes provided by the Syrian army in Palmyra.
How many artifacts there are in total is difficult to say, given the state they were found in.
The lack of documentation for the artifacts also adds to the restoration challenge.
“A big part of the documentation in the Palmyra museum, was damaged with the antiquities and computers,” archaeologist Raed Abbas said.
“A statue needs pictures… in order to be rebuilt.” — Reuters

Russian group eyes P8-B investment in Maguindanao banana plantation

A RUSSIAN group is looking to invest P8 billion to build a banana plantation in Camp Abubakar, the main enclave of the Moro Islamic Liberation Front (MILF) in Maguindanao and Lanao del Sur, according to Agriculture Secretary Emmanuel F. Piñol.
“The project is expected to employ about 10,000 workers, most of whom former rebel combatants and their children,” Mr. Piñol said in a Facebook post on Tuesday.
He and Maguindanao Governor Esmael Mangudadatu on Monday accompanied the Russian group led by French-Russian businessman Robert Gaspar to inspect the proposed banana plantation area in Barangay Oring, Buldon, Maguindanao.
“Right now, Russia is keenly looking at the Philippines to supply some of its requirements. Example, we don’t know this but Russia has been buying Philippine bananas through China…We indirectly export bananas to Russia. Now, this group would like to do it directly. They have expressed interest to invest in cavendish bananas,” Mr. Piñol said in a press conference in Pasay on Tuesday.
The Agriculture chief said the Russian businessmen expressed interest in investing in the Philippines after the visit of President Rodrigo R. Duterte in Russia in May 2017.
The Russian group is also in aquaculture production in Polloc Cove in Maguindanao, Mr. Piñol said.
“Everything that we will produce here, especially bananas and sea products will have a waiting market in Russia,” Mr. Gaspar was quoted by Mr. Piñol as saying. — R.J.N.Ignacio

Tanghalang Pilipino’s Coriolano: a play for turbulent political times


THE Cultural Center of the Philippines’s Tanghalang Pilipino (TP) is about to stage a play that seems familiar in the context of current politics.
Coriolano, a translation by Palanca Award-winner Guelan Luarca of William Shakespeare’s tragedy Coriolanus, tells the story of a legendary Roman soldier who engages in politics, but whose temper and tyrannical personality lead him to choose allegiances that bring about his downfall.
A rarely staged Shakespeare work, Coriolano will be directed by Carlos Siguion-Reyna and will open on Feb. 22, as the closing play in TP’s 32nd season.
TP’s senior actor Marco Viana will play the title role, while the supporting cast will come from other theater companies like Frances Makil-Ignacio of Dulaang UP and Brian Sy of Tanghalang Ateneo.
Meanwhile, TP’s 33rd theater season will “will further strengthen TP’s commitment to theater that educates, entertains, and transforms minds and social consciousness,” said TP artistic director Fernando “Tata Nanding” Josef via Facebook when BusinessWorld asked the company about its 2019 outlook.
Some time in August, TP will present a “twin bill of two significant past musical productions,” said Mr. Josef. These are Mabining Mandirigma and Aurelio Sedisyoso — two historical dramas in the form of steam punk and rock sarsuwela.
The next few months will see the production of important and socially relevant shows: Bibeth Orteza’s Katsuri, a Hiligaynon version of John Steinback’s Of Mice and Men; the classic Ilocano epic Lam-Ang; and Batang Mujahideen, a story of the reconciliation of Muslims and Christians in Mindanao.
Coriolano will run from Feb. 22 to March 17 at the Little Theater of the Cultural Center of the Philippines (CCP). Tickets are available at the CCP box office and at TicketWorld (www.ticketworld.com.ph).

ADB eyes credit facility for insurance pool

THE ASIAN Development Bank is eyeing a credit facility for parametric insurance.

THE ASIAN Development Bank (ADB) said the Philippines will benefit from a fast-disbursing parametric insurance pool, eyeing a credit facility for the program.
“There is a strong case for the development of a city disaster insurance pool in the Philippines. There is significant disaster risk across the Philippines, with many cities exposed to high levels of typhoon and/or earthquake risks. Moreover, with the expected continuation of rapid urban growth, future disaster losses could be significantly higher than recently experienced,” the ADB said in a report titled Philippine City Disaster Insurance Pool Rationale and Design.
“Parametric insurance coverage would enhance the effectiveness of current post-disaster funding sources by providing rapid post-disaster liquidity,” it added.
Unlike traditional indemnity-based insurance that takes a long time to assess the damage involved, a parametric insurance policy program will immediately disburse a pre-determined amount once certain disaster-related indexes are met such as peak gust for storms, and spectral acceleration for earthquakes, among others.
The program does not aim to cover total damages and losses as the payout may not automatically match actual loses, but instead seeks to provide immediate funds until additional resources become available, which will allow the government to provide better emergency response.
“Under current arrangements, a number of cities do not have adequate dedicated financial resources to combat the effects of severe typhoons or earthquakes,” the regional development lender said.
The ADB said it is eyeing to support the Philippines in financing a parametric insurance pool.
“PCDIP (Philippine City Disaster Insurance Pool) is expected to be primarily capitalized through a sovereign loan from ADB in its initial years,” the ADB said.
“Parametric insurance can provide payouts within a few weeks of a disaster, and can be structured to allow payouts to be flexibly used to address a range of potential funding needs. Such rapid payouts would complement existing post-disaster financing arrangements, such as indemnity insurance purchased through GSIS (Government Service Insurance System) which is targeted at longer-term financing needs during the post-disaster reconstruction phase.”
“To enable cities to take full advantage of the benefits of parametric insurance, it is crucial that the implementation of the proposed parametric pool is embedded into the Philippine legal and regulatory environment, and that appropriate inputs and guidance provided from relevant national government agencies, including from COA (Commission on Audit) on the use of payouts, are implemented,” it added.
The Philippines currently has a one-year parametric insurance policy with the World Bank that began on Dec. 20 worth P20.49 billion covering 25 disaster-prone provinces after paying a P2-billion premium. — Elijah Joseph C. Tubayan

Tuguegarao City gov’t taps Globe for Wifi project

THE enterprise arm of Globe Telecom, Inc. said it partnered with the local government of Tuguegarao City for its free WiFi project.
The telecommunications company said in a statement on Tuesday the Tuguegarao City government signed up for Globe Business’ Direct Internet service.
“Aside from the need to have fast and reliable internet connectivity to effectively cater to the communication needs of all offices in the City Hall, the project also aims to extend its reach to Public Schools, specifically the students and teachers,” Tuguegarao City Mayor Jefferson P. Soriano said in the statement.
Direct Internet is Globe Business’ WiFi offer for enterprises that gives direct and secure connection within an office to ensure seamless connection for data transfer, voice and video call activities.
Globe said the partnership with the Tuguegarao City government is aligned with the company’s goal of encouraging local government units to adopt the integration of information and communications technology in government procedures.
“Globe Business is thrilled and privileged to have been chosen by the City of Tuguegarao. We are very excited for the partnership as this pushes us to strive for excellence and commit to our purpose to help build our nation,” Peter D. Maquera, Globe’s senior vice-president for its enterprise group, said in the statement.
In the nine-month period ending November 2018, Globe said its attributable net income rose 17% to P15.15 billion, driven by a 9% hike in consolidated service revenues to P103.3 billion on increased data revenues across all business segments. — Denise A. Valdez

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