Sept. factory growth slowest in 3 months

October 2, 2019 | 12:34 am

BUSINESS CONDITIONS for manufacturers in the country improved by the slowest clip in three months in September, as a cautious outlook as well as slower employment and purchasing growth capped the lift from “a solid rise” in new orders, according to the latest Philippine survey conducted by IHS Markit, which released results on Tuesday.

The IHS Markit Philippines Manufacturing PMI bared a 51.8 reading for September that compared to August’s 51.9 and July’s 52.1, while the separate IHS Markit ASEAN Manufacturing PMI showed the Philippines keeping the second place from August among the seven countries covered by the regional survey.

The Purchasing Managers’ Index (PMI) is the weighted average of five sub-indices, namely: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%). Overall readings above 50 signal expansion on a monthly basis while those below that mark denote contraction.

“Businesses were encouraged by a solid rise in total new orders, despite overseas demand falling at the quickest rate seen in the series history so far,” according to a summary of Philippine survey results.

“However, difficult trading conditions led to a dampened one-year outlook, while employment and purchasing activity growth also slowed.”

In the region, the Philippines was bested by Myanmar which, with its 52 reading unchanged from August, has topped Southeast Asia since February.

The Philippines outpaced Southeast Asia’s 49.1 reading, which nevertheless picked up from August’s 48.9 — amid “the fastest decline in production since July 2017 and a back-to-back reduction in new orders” — but still marked the fourth straight month of slowdown in the region.

Philippine production growth slowed for the third straight month, even as new orders increased at a faster pace than in August — but mainly due to stronger domestic demand. Export orders fell for the fourth month in a row, marking the steepest drop in Philippine survey history.

IHS Markit Economist David Owen noted that “[a] key factor was falling export sales, which declined at the quickest rate recorded in the series history so far.”

“It appears that firms are losing hope of there being an end in sight for the US-China trade war, which looks to be dampening export orders at an accelerated pace in the Philippines.”

At the same time, “domestic new orders are increasing and leading to a solid rise in total demand, allowing firms to continue on their path of expanding production.”

The increase in prices of production inputs accelerated by the quickest pace since February, as some respondents said “a shortage of materials led some suppliers to raise their fees.”

But output price increased at the slowest clip since June 2017, with some Philippine respondents saying that competitors’ lower prices made them reduce charges.

And “while business expectations were positive, they were also the least optimistic on record,” mainly due to concerns about escalating Sino-US trade tensions.

“The one-year business outlook among Filipino manufacturing companies fell to a new survey low in September. While still optimistic on average, firms were at their most downbeat since the series began in 2016,” Mr. Owen said.

Employment rose only marginally in September and at a slower pace than in August “as greater labor requirements were offset by resignations at a number of companies.” — Beatrice M. Laforga

GDP expansion seen to pick up, but S&P trims projections

October 2, 2019 | 12:33 am

THE ECONOMY stands a chance of still hitting the lower end of the government’s 6-7% growth forecast for this year, according to separate analyses by S&P Global Ratings as well as First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) that bared expectations of “acceleration” this semester from the first half’s disappointing 5.5% clip.

DEBT WATCHER CUTS FORECASTS
In its Asia-Pacific Quarterly: Confidence is Shaken but Policy is Stirred report, S&P said it has further slashed its 2019 GDP growth projection for the Philippines to six percent from a 6.1% penciled in June — citing spending impact from the three-and-a-half month delay in national budget enactment — 6.3% in April, 6.4% in December and 6.6% in November last year.

“Sentiment in the private domestic economy appears to have taken a significant hit over the past two quarters, which combined with a negative fiscal impulse in the first half to produce sub-six percent year-on-year growth for the first two quarters,” S&P said.

“The second half of this year could see some acceleration in growth to bring the overall figure to six percent for 2019, largely driven by a significant ramp-up in public investment as the government tries to catch up with its infrastructure plans,” it added.

For next year, the credit rater — which in April raised the Philippines’ credit rating a notch to “BBB+”, giving the country its best debt grade yet at two notches above minimum investment grade — slashed its economic growth projection to 6.2% from the 6.4% given in June (and from 6.5% previously).

“Next year… will see some extra support as this year’s monetary policy easing takes effect,” S&P said.

The central bank has slashed benchmark interest rates by a total of 75 basis points so far this year — with the last of three equal 25-bp cuts announced on Thursday last week — to four percent, 3.5% and 4.5% for overnight reverse repurchase, as well as overnight deposit and lending, respectively, in the face of inflation that has been slowing considerably from last year’s successive multi-year highs that culminated in a 6.7% nine-year peak in September and October. But that still left 100 bp from last year’s cumulative 175 bp hike, driving analysts to believe that more cuts will be on the table in either the Nov. 14 or Dec. 12 monetary policy reviews and further next year.

S&P slashed its Philippine GDP projection for 2021 to 6.4% from the 6.6% given in June, but kept its 2022 forecast at 6.7%.

The Philippines will be among the fastest growth among the 13 Asia-Pacific economies in the S&P report. For this year, it will be outpaced slightly by India and China which will grow by 6.3% and 6.2, respectively. But from 2020 to 2022, it will be second only to India’s seven percent, 7.1% and 7.4%, respectively. The Philippines will also be faster from 2019 to 2022 than Asia and the Pacific (4.9%, 4.8%, five percent and 4.9%) and emerging Asia (5.5% from 2019 to 20222).

S&P said that there will be “no end in sight for Asia-Pacific’s growth slowdown” with economic expansion “below trend in most economies, putting downward pressure on inflation.”

In the same report, S&P also said that the Philippines can be expected to join continued policy rates easing across Asia and the Pacific.

“Much of the region has already embarked on a rate-cutting cycle,” the credit rater noted.

“In the absence of a US recession or China hard landing, this cycle may not have much further to run, but it remains hard to see tightening on the horizon,” it said, adding that it expects more policy rate trims in Australia, India, Indonesia, Korea, the Philippines, and Thailand.

FMIC AND UA&P
In their joint The Market Call Capital Markets Research released also on Tuesday, FMIC and UA&P said that “huge job gains (2.3 million jobs in the year ending July), inflation expected to go below 1.5% by September and the revival of national government spending augurs well for faster GDP growth in the second half.”

Both outfits now expect overall economic growth to have picked up to six percent in the third quarter and to “accelerate further to 6.5%” this quarter, especially amid “huge spending on infrastructure and capital outlays in the third and fourth quarters…” That will result in 6-6.5% growth for 2019. — Luz Wendy T. Noble and Beatrice M. Laforga

ASEAN manufacturing purchasing managers’ index, September (2019)

October 2, 2019 | 12:33 am

More infrastructure projects close in on final approval by NEDA

October 2, 2019 | 12:32 am

THE NATIONAL Economic and Development Authority (NEDA) Investment Coordination Committee-Cabinet Committee (ICC) has approved more projects, involving infrastructure as well as social and governance reforms that are a centerpiece of the current government’s development efforts.

NEDA said in a press statement on Tuesday that the ICC approved in a meeting on Friday last week — besides an unsolicited proposal by a consortium made up of seven of the country’s biggest firms to rehabilitate the Ninoy Aquino International Airport in Pasay City, as reported later that day — the P14.97-billion Pasacao-Balatan Highway, a 40.69-kilometer four-lane road along the west coast of Camarines Sur that will provide access to various tourism sites and directly link the municipalities of Pasacao and Balatan to each other. This project will be funded through a budget allocation of Department of Public Works and Highways as its implementing agency, NEDA said.

Another infrastructure project approved was the P7.42-billion aqueduct under the Expanded Angat Water Transmission Improvement Project ofthe Metropolitan Waterworks and Sewerage System, with an extended implementation period until July 2023, or a year after President Rodrigo R. Duterte ends his six-year term. NEDA said the project “will involve the detailed engineering design and construction of a steel aqueduct to provide operational flexibility to raw water transmission from Ipo Dam to La Mesa Dam,” with the aim of improving water supply to Metro Manila.

The ICC also approved P11.46 billion in additional funding for the Infrastructure Preparation and Innovation Facility through loans from Asian Development Bank, which was meant to strengthen the quality of infrastructure project proposals. “This will also accelerate early project implementation following ICC approval through the conduct of detailed engineering design and tender support, and strengthen the capacity of key agencies responsible for infrastructure projects,” it added.

The ICC also approved P27.92 billion in funds to accelerate subdivision ofCollective Land Ownership awards for generation of individual titles, an effort of the Department of Agrarian Reform that will be funded through World Bank loan.

Also approved was the P1.56-billion Local Governance Reform Sector Development Project of the Finance department and its Bureau of Local Government Finance which aims to “strengthen the policy and administrative environment for enhancing local source revenues from real property tax by instituting reforms in real property valuation and assessment”.

It also approved the Development Objective Assistance Agreement: Improved Health for Underserved Filipinos of the Department of Health, with assistance from the United States Agency for International Development. The agreement focuses on top health concerns across the country such astuberculosis, family planning, maternal and child health and improvement ofgovernance mechanisms in relation to theUniversal Health Care Act.

Lastly, a two-year extension of the World Bank loan validity for the Philippine Rural Development Project of the Department of Agriculture, from May 31, 2021 to May 31, 2023, was also approved.

Five bilateral agreements between the Philippines and the United States were each also extended by a year, covering areas of economic growth, democracy and governance; basic education; health; Mindanao peace and development; as well as environment, water and climate change.

Out of the 75 flagship projects of the current government, NEDA said in July that 21 projects are on schedule to be completed by 2022, when Mr. Duterte ends his term, at an estimated total cost of P187.63 billion, while 54 other projects cumulatively worth P2.23 trillion are expected to be completed after 2022. — BML

Central bank chief would rather online gambling firms leave

October 2, 2019 | 12:31 am

SINGAPORE — Banning online gambling will have little impact on the Philippine economy, its central bank chief said on Tuesday, after China urged Manila to outlaw the cross-border activities it says pose money laundering risks.

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno, who has ordered a study on the economic impact of halting online gambling, told Reuters he would rather the operators exit the country.

Regional neighbor Cambodia announced it would ban online gambling earlier this year.

SOME BENEFITS, SOME RISKS
“There’s some benefits, in terms of if they pay their taxes but there are also some risks. I tend to be risk averse. I’d rather they leave, if I have my way,” Mr. Diokno said on the sidelines of a business event in Singapore.

Online gambling companies, known in the Philippines as POGOs for Philippine offshore gambling operators, are a boon for the local economy, drawing many visitors from China who work in them, fuelling property demand and retail spending.

The POGOs, which bar Filipinos from playing, contribute to national coffers through license fees.

But Mr. Diokno said that the industry contributed only “a few billion” pesos in tax and had little impact on the real estate sector, while he said it presented “a risk of money laundering”.

China has said it hopes the Philippines will ban online gaming to support its crackdown on cross-border gambling, which it said is used by foreign criminals to embezzle funds and illegally recruit workers. The Philippine gaming regulator has stopped issuing licenses to online gambling firms, and lawmakers and some ministers have called for tighter controls on Chinese visitors, saying many are illegals whose presence raises security concerns.

“We have already stopped giving licenses in the first place. Should they violate our tax laws, we will expel them,” Mr. Diokno said.

According to official data, there are only 60 POGOs operating in the country, but critics of the industry say that grossly undercounts the actual number. — Reuters

From burger flipper to franchiser

October 2, 2019 | 12:30 am

The Entrepreneur Of The Year Philippines 2019 has concluded its search for the country’s most successful and inspiring entrepreneurs. Entrepreneur Of The Year Philippines is a program of the SGV Foundation, Inc. with the participation of co-presenters Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange. In the next few weeks, BusinessWorld will feature each of the finalists for the Entrepreneur Of The Year Philippines 2019.

Rolandrei Viktor Varona
President and CEO
Zark’s Food Ventures Corp.

BILLIE JEAN KING once said, “Champions keep playing until they get it right.” In sports and in business, those who work hard and persevere are rewarded.

Rolandrei “Zark” Varona, 34, entered the game in unfavorable conditions with a failed franchise venture and dwindling capital.

Nevertheless, he paired his natural business acumen with an unwavering tenacity and grew from a humble stall owner to a food franchise powerhouse.

Although he lost his father at the age of two, he recalls many fond childhood memories with his mother and sister — especially their family meals after Sunday mass. The restaurants they frequented left a deep impression on him and by high school, he had his heart set on becoming a chef.

“I knew that I wanted my own restaurant someday,” he said.

It was natural that he went on to study Hotel and Restaurant Management in the Philippine Women’s University.

Even before graduating, Mr. Varona started with capital from his allowance and his salary as a paid intern for a famous steakhouse. He later had the opportunity to join a cruise ship as a cook, saving up most of his earnings for his future business.

Mr. Varona shared that he battled homesickness, but his determination to put up his own restaurant and the continuing support of his family pulled him through.

After two years at sea, he was 23 and had enough savings to start his own business. Wanting to learn the ins and outs of running a business, Mr. Varona decided to purchase a noodle house franchise. He personally filed the papers and got the necessary permits to open his stall in Divisoria.

He quickly realized that running a business was not easy. After a few months of operation, his stall was earning barely enough to break even and he was slowly using up his capital. He decided to close it down.

But Mr. Varona never faltered, he continued scouting for potential business locations. He found a small space along Taft Avenue, but thought that a food cart would not match the market.

However, something about the location kept drawing him back until he finally decided to create his own concept. He studied what kind of food would sell in the predominantly student market in the area. He realized that there wasn’t any burger joint with student-friendly prices. As a burger lover himself, Mr. Varona often felt frustrated that there were few options between fast food and gourmet burgers. With his experiences from travelling and his skill in cooking, he developed a concept that would address the market gap.

With a portion of his savings gone, Mr. Varona borrowed P200,000 from his mother to complete his P600,000 initial investment to make Zark’s Burgers a reality. Mr. Varona was in charge of almost everything — from filing permits, menu development, construction and interior design.

In 2009, Zark’s Burgers was finally unveiled to the public with a promise to deliver burgers that are fresh, huge and great.

Named after himself, Zark’s Burgers sports theme reflected Mr. Varona’s like for sports, big food and value for money.

“I don’t serve typical cheeseburgers,” Mr. Varona said of his culinary creations.

Customers have over 20 burgers to choose from — most of which are under P250 — with interesting variations such as the bacon wrapped burger and glazed donut burger.

Inspired by TV show Man vs. Food, Mr. Varona developed his own burger challenges — Tombstone and Jawbreaker — that captured his young market. The highly popular Jawbreaker challenge, where the winner wins a free shirt and has his picture included in a hall of fame, has become a standard dare for barkadas — inadvertently becoming part of youth culture.

In just seven months of operation, Zark’s Burgers was able to earn back Mr. Varona’s initial investment. Mr. Varona admits he did not expect the warm welcome he received from students. With this initial success, he was able to expand the original 16-seater space to 120 seats.

Soon enough, he started opening branches across Metro Manila and eventually entered the Visayas and Mindanao markets.

As he expanded, he started to struggle managing the company alone and realized that he couldn’t develop a sustainable business by himself.

“I was learning but it wasn’t at the same pace with the company’s growth,” Mr. Varona said.

Seeing his own limitation, he professionalized his team.

As a young entrepreneur, Mr. Varona knows he has much to learn and looks to seasoned professionals to gain insights on how to run the business. When he found out that his food cost was high, compared to industry standards, he approached one of his former mentors and worked with him to slowly improve efficiency at Zark’s Burgers.

While Mr. Varona was initially apprehensive about the possibility of franchising, he recognized the difficulty and cost of managing branches outside of Metro Manila — especially in the Visayas and Mindanao. He realized that in order to grow the business and eventually expand outside the Philippines, he had to franchise. He hired an expert on franchising and created a system for franchising. He would also partner with his long-time supplier to put up commissaries for burger patties and seasonings.

Now on its 10th year, Zark’s Burgers boasts of 60 branches nationwide and employs over 800 people across all facets of its operations.

For Mr. Varona, however, success is being able to do what you love and having the ability to give back. “Cheesy as it sounds, I want the economy itself to grow,” Mr. Varona said.

Apart from his regular outreach programs, he wants to transform lives by imparting to aspiring entrepreneurs the skills and knowledge needed to start their own business. He provides mentorship through Endeavor Philippines, Resto Coach, Go Negosyo and giving talks in universities.

Like many others, Mr. Varona embarked on his entrepreneurial journey armed with a dream. Unlike many, he never lost sight of his goal and persisted through every challenge. He tells aspiring entrepreneurs, “Look into yourself and find your purpose. From there, focus on your dream and goals.”

The official airline of the Entrepreneur of the Year Philippines 2019 is Philippine Airlines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. Banquet sponsor is Uratex.

The winners of the Entrepreneur Of The Year Philippines 2019 will be announced on Oct. 15 in an awards banquet at the Makati Shangri-La Hotel.

The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2020 in Monte Carlo, Monaco in June 2020. The Entrepreneur Of The Year program is produced globally by Ernst & Young.

Converge founder scraps plan to acquire Vulcan

October 2, 2019 | 12:07 am

VULCAN Industrial & Mining Corp. said the firm owned by Pampanga-based businessman Dennis Anthony H. Uy has backed out of the deal to acquire a majority stake in the company.

In a disclosure to the stock exchange on Tuesday, Vulcan said it was advised by parent National Book Store, Inc. (NBS) that Mr. Uy’s Zap Cove Development Corp. will “no longer proceed with its proposed transaction.”

Zap Cove signified its intent to acquire a 75.9% stake in Vulcan last year, seen as a move to use it as vehicle for backdoor listing.

The transaction involves Zap Cove’s purchase of NBS’ subscription rights to 486.06 million partially paid shares in Vulcan; assumption of NBS’ obligations for the unpaid subscription price on the said shares worth P457.50 million; and the subscription to 2.55 billion shares in Vulcan’s authorized but unissued capital stock with a par value of P1 per share.

At the same time, Zap Cove previously said it will undergo a capital restructuring process that will allow it to subscribe to the shares in Vulcan. This would have made Mr. Uy and businessman Simon Lee Paz the majority investors in Zap Cove.

Mr. Uy is the founder and the president of telco firm Converge ICT Solutions, Inc., which was among the companies interested in the government’s search for a third telco player last year. The company was supposed to partner with the South Korean telco giant KT Corp., but backed out as it cited the absence of a level playing field amid existing telco players.

Vulcan said it will look for other business opportunities following the cancellation of the deal.

“In light of this development, management will explore other business opportunities and will present the same to the Board of Directors for consideration in due course,” the company said.

In 2017, NBS also dropped its planned backdoor listing via Vulcan, three years after its stake in the firm to 68%. It instead opted to implement a franchising strategy to boost expansion.

Shares in Vulcan fell 10.83% or 13 centavos to close at P1.07 each at the stock exchange on Tuesday. — Arra B. Francia

Gov’t makes full award of bonds as yield ends flat on BSP easing

October 2, 2019 | 12:06 am

THE GOVERNMENT made a full award of the reissued three-year Treasury bonds (T-bond) it auctioned off yesterday following monetary easing moves by the Bangko Sentral ng Pilipinas (BSP) last week and amid easing inflation.

The Bureau of the Treasury (BTr) successfully raised P20 billion worth of the reissued bonds as programmed as the offer was more than twice oversubscribed, with bids totalling P50.8 billion.

The three-year papers, which have a remaining life of two years and nine months, fetched an average rate of 3.996%, 3.5 basis points (bps) higher than the 3.961% quoted when the tenor was last offered on Aug. 27.

The three-year notes fetched 4.164% yesterday, based on the Bloomberg Valuation Service Reference Rates.

Deputy Treasurer Erwin D. Sta. Ana said the yield on the three-year bond ended flat as the market priced in the announcement of a 100-bp cut in banks’ reserve requirement ratio (RRR) in November as well as the central bank’s forecast for September headline inflation.

“It was just over three basis points difference so we view it as flat from the previous [auction]. Over the course of the last few weeks, the rates have inched up a bit but now it has started to moderate a little, and we think that the factors contributing to that, of course the additional RRR cut in November, the…BSP (Bangko Sentral ng Pilipinas) inflation figure for September,” Mr. Sta. Ana told reporters after the auction.

He said the RRR cut, as well as maturing government bonds in November, will result in increased liquidity.

A bond trader agreed, saying banks asked for slightly higher yields as expected after the BSP’s decision to cut policy rates by another 25 bps and also reduce banks’ reserve ratios by 100 bps.

“[The result was] kind of expected after the combo cuts. Also, earlier today, [BSP Governor Benjamin E. Diokno] committed to more RRR cuts during his term,” the trader said in a phone message on Tuesday.

The trader added that the market has calmed down as global oil prices continue to normalize following the attack on Saudi’s oil facilities last month.

The central bank’s policy-setting Monetary Board cut benchmark interest rates by another 25 bps at its meeting last Thursday, bringing the rates for overnight reverse repurchase, overnight deposit and lending to four percent, 3.5% and 4.5%, respectively, amid easing inflation.

On Friday, the central bank announced it will reduce lenders’ RRR by another 100 bps, which will take effect in November. This will bring the reserve requirement of universal and commercial banks to 15% from 16%, thrift banks to five percent from six percent, and to three percent from four percent for rural and cooperative banks.

Meanwhile, the BSP’s Department of Economic Research said on Monday that headline inflation in September likely settled within the 0.6-1.4% range amid declining rice prices and electricity rates, which will offset the recent uptick in fuel prices and other prices.

The estimate range for September inflation — which the Philippine Statistics Authority will report on Oct. 4 — compares to August’s 1.7% and the year-ago 6.7% which was a nine-year high that was sustained in October 2018.

Inflation averaged three percent in the eight months to August, against the central bank’s downward-adjusted 2.5% forecast average for the entire 2019.

The floor of BSP’s September estimate, if realized, would match the rate recorded in March 2016 and would be the slowest since November 2015’s 0.3%. It will also result in a 2.8% average for the nine months to September.

The ceiling of the central bank’s estimate range for last month, meanwhile, would be the slowest since August 2016’s 1.3%. It will drive year-to-date inflation to 2.9%.

The government plans to borrow P220 billion from the local market in the fourth quarter via a mix of T-bonds and Treasury bills.

It is looking to raise P1.189 trillion this year from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — B.M. Laforga

SM ramps up property, retail expansion in provinces

October 2, 2019 | 12:06 am

THE SM Store now has 63 outlets around the country.

SM INVESTMENTS Corp. (SMIC) continues to expand its residential, hotel, and retail offerings in the provinces, banking on regional economic growth.

In a presentation posted on its website Monday, the listed conglomerate said its residential arm SM Development Corp. (SMDC) currently has a land bank of 669 hectares outside Metro Manila. This is higher than the 503 hectares it had by the end of the first quarter.

Its land holdings in Metro Manila likewise increased to 91 hectares, from 79 in the first quarter.

SMDC has programmed to spend P44 billion to construct more residential projects in 2019, alongside the launch of 15,000 to 18,000 units.

Meanwhile, SM Retail, Inc. now operates 2,600 stores covering a gross saleable area of 2.93 million square meters (sq.m.). Of this, 43% are in Metro Manila, while 38% are in Luzon. The remaining 12% and six percent are in Visayas and Mindanao, respectively.

The company’s strategy is to put up more stores nationwide for faster market penetration and to promote regional growth. About 80% of the new stores it opens are outside Metro Manila.

SM Retail is divided into the food and non-food segments. The former includes supermarkets and hypermarkets, which are typically anchor tenants in SM malls. This also includes Savemore, which are mid-sized, stand-alone stores; Waltermart located in WalterMart Malls expanding in Luzon; and Alfamart, its mini-mart format which provides supermarket goods and prices in neighborhood locations.

The non-food retail segment consists of The SM Store, which now has a total of 63 stores covering 795,864 sq.m. of GSA. It serves as an anchor tenant in SM malls and offers a wide range of merchandise and price points for all customer segments.

On the other hand, its hotel arm looks to take advantage of the growing tourism opportunity in the country. It has a total of 1,961 rooms under its portfolio, less than half of which comes from the Park Inn brand located in Davao, Clark, Iloilo, and Quezon City.

SM Hotels is pursuing projects in San Fernando, Pampanga and SM Seaside City, Cebu.

“SM Hotel’s planned expansions will complement existing mall, commercial, and residential developments,” the company said.

SMIC’s net income attributable to the parent grew 27% to P23 billion in the first half of 2019, after revenues rose 14% to P233.7 billion.

Shares in SMIC climbed 1.65% or P16 to close at P987 each at the stock exchange on Tuesday. —Arra B. Francia

RCBC exercises call option on P10-billion Tier 2 notes

October 2, 2019 | 12:05 am

RIZAL Commercial Banking Corp. has exercised its call option on the notes. — *BW FILE PHOTO*

RIZAL COMMERCIAL Banking Corp. (RCBC) has exercised its call option on the P10-billion notes it issued back in 2014 to comply with regulatory capital requirements, it said on Tuesday.

“This is to advise the Exchange that the Rizal Commercial Banking Corporation has completed the exercise of its call option on the P10 billion 5.375% unsecured subordinated debt qualifying as Basel III-Tier 2 capital due 2024,” the bank said in a disclosure.

RCBC raised P10 billion worth of unsecured subordinated Tier 2 notes back in 2014.

The notes, which have a tenor of 10 years and three months, had an early redemption option for the bank after five years and three months.

Basel 3 is a set of reforms introduced by the Basel Committee on Banking Supervision, which were gradually implemented by the Bangko Sentral ng Pilipinas for local banks.

Among the reforms implemented was the introduction of capital buffers to withstand economic and financial stress, among others.

RCBC returned to the US dollar bond market last month as it issued $300 million in five-year unsecured sustainability bonds to support its loan portfolio and green projects.

The notes, which bear a coupon rate of 3% per annum, was a drawdown from its $2-billion medium-term note program under its Sustainable Finance Framework.

RCBC established its Sustainable Finance Network in May, which serves as a framework for sustainable financing instruments to fund loans and projects that have environmental and social benefits.

In June, RCBC issued P8 billion in two-year Association of Southeast Asian Nations (ASEAN) Sustainability Bonds, the first of its kind in the Philippines under the ASEAN Sustainability Bond Standards 2018. The proceeds of the issue will fund environmental and social projects.

The two-year debt papers carry a coupon of 6.15% per annum to be paid quarterly until May 2021. RCBC saw strong demand from retail investors, prompting it to upsize the issuance from the P5 billion it initially intended to offer.

In January, the bank also raised P15 billion worth of 1.5-year green bonds under its green finance framework. Proceeds of this issuance will be used to support RCBC’s expansion and initiatives in the green space.

RCBC’s consolidated net income climbed 23% year-on-year to P2.7 billion in the first semester, backed by the continued growth of its core businesses.

Shares in RCBC went down 20 centavos or 0.75% to P26.30 apiece on Tuesday. — BML

BenCab across mediums

October 2, 2019 | 12:05 am

MASTERPIECES by celebrated artists that adorn a house or room usually come in the form of paintings or sculptures. But if one would like to have a work by National Artist for Visual Arts Benedicto “BenCab” Cabrera, they can now choose from a selection of his famous paintings which have been transformed into tapestries.

Abitare Internazionale, a local distributor of European furniture and home accessories including the Dutch brand Moooi Carpets, launched the BenCab + Moooi Carpets Series 7 — a collection of limited edition tapestries of the artist’s works.

The collaboration began when interior designers and managers of Abitare Internazionale Jeanne Lim Wee and Filaine Tan thought of incorporating Filipino artists’ works into carpets.

“We saw the possibility with enlarging something small. It is something that you can use for lobbies or big [spaces]. It is a good way to life-size an art,” Ms. Tan told BusinessWorld during the launch of the tapestries at The Peninsula Manila Hotel in Makati on Sept. 25.

“We gave the concept to [Mr. Cabrera] through a common friend. He went to our shop and took a look at the carpets. He approved of the idea and he started to give materials,” she added.

According to Ms. Tan, their first collaboration in 2017, which featured eight pieces, was “sought after.”

This year, the second collaboration features seven artworks: Dance in Five Movements, Shoe Vendor, Mother and Child, Sabel, Images in the Past, Milk Carrier, and Variation of Sabel II.

Ms. Wee explained that the designs are printed using chromojet printing technology with a hundred meter machine where the material undergoes steaming and pressing.

The limited edition tapestries are for sale and are on view at The Pen’s lobby until Oct. 13. Two of the pieces were sold during the launch.

ON PAGES
Coinciding with the launch of the tapestries was the launch of a book, BenCab: The Filipino Artist, authored by Patrick D. Flores, museum curator and art studies professor at the University of the Philippines-Diliman.

To differentiate the book from previous publications about Mr. Cabrera’s practice and works, BenCab: The Filipino Artist focuses on form and language.

The book presents modern form through the devices of the grid, the drape, and the stain which are assessed through what Mr. Cabrera calls the “Philippine interest” — pertaining to his sensitivity into art and society.

“Marking this form as modern initiates a conversation on what constitutes the modern beyond the neorealism of the 1950s and the abstraction of the ’60s, and how it prefigures the social realism of the ’70s,” a press release said.

Mr. Flores describes the National Artist’s body of work as “figurative, socially responsive, historically aware of what has happened to the Philippines, and also able to make comments on the present situation.”

The two-volume book also has an accompanying catalogue which presents works from eight exhibitions held in 2016 — the 50^th year of Mr. Cabrera’s professional practice. It includes curatorial interpretations of his works.

With a career as a visual artist spanning more than 50 years, Mr. Cabrera considers most of his works a favorite. “It’s hard to pinpoint,” he told BusinessWorld.

“Every style of every period is a child of the artist,” Mr. Flores said.

THROUGH FOOD
In celebration of the Filipino artist, The Peninsula Manila also launched the BenCab “Art” Afternoon Tea, created by executive pastry chef Xavier Castello for The Lobby. The menu is inspired by Mr. Cabrera’s Sabel and Larawan images.

The special menu consists of: curried prawn and apple salad with citrus aioli on shortbread; Smoked turkey ham, mature Cheddar, and tomato on wheat bread; Cured salmon, dill cream cheese, and golden trout roe on spinach bread; Grilled herbed squash and caramelized onions on a brioche roll; Mushroom quiche; Davao chocolate truffle cake; Mango panna cotta; Coconut pandan éclair; Calamansi meringue tartlet; Sans Rival macaron; and Peninsula raisin scones served with lemon curd, Baguio strawberry jam, and clotted cream.

The BenCab “Art” Afternoon Tea is available for P1,590 per guest, or P2,190 with a flute of Champagne. It is served daily until Oct. 15 from 2:30 to 5:30 p.m.

For book orders, visit www.bencabmuseum.org/ or send an e-mail to bencabartfoundation@gmail.com. BenCab: The Filipino Artist is priced at P12,800. For inquiries on the BenCab + Moooi Carpets Series 7, call 892-1887. — Michelle Anne P. Soliman

Angkas eyes provincial expansion

October 2, 2019 | 12:05 am

By Denise A. Valdez, Reporter

MOTORCYCLE ride-hailing platform Angkas (DBDOYC, Inc.) said it is looking to take its services to more regions outside Metro Manila once the government passes a law legalizing motorcycle taxis.

George I. Royeca, Angkas head of regulatory and public affairs, told reporters after a briefing in Pasay City Tuesday that the company is aiming to expand its operations nationwide.

“We hope that when we legalize the motorcycle taxi that we can run this nationwide. Traffic is not exclusive to Metro Manila,” he said.

Angkas is currently present in Metro Manila and Metro Cebu for a six-month pilot test of its ride-hailing services. Mr. Royeca said the company is looking at “primary cities” like Davao, Cagayan De Oro and Batangas for expansion.

To recall, the Department of Transportation (DoTr) gave Angkas the green light to do a trial run of two-wheeled vehicles for public transportation in May. This was after a two-year tug of war with the government that resulted to an on-again, off-again operations for Angkas since 2017.

The current Land Transportation and Traffic Code, or Republic Act No. 4136, doesn’t include single motorcycles as among the vehicles allowed to operate for public transport.

There are at least four bills filed in the Senate by Senators Ralph G. Recto, Grace Poe-Llamanzares, Imee R. Marcos and Juan Edgardo M. Angara seeking to regulate the use of motorcycles as public utility vehicles. A similar bill sits in the House of Representatives filed by Cebu City 1^st District Rep. Raul V. Del Mar.

“We’re just waiting for the schedule in the Senate so we can present interim results of the TWG (technical working group), and hopefully, we’re able to push this into a law,” Mr. Royeca said.

“But I think everyone’s in agreement na [already] that motorcycle taxis are something that the country needs… Habal habal has been there for a while. It’s high time that we regulate it,” he added.

Angkas currently has 27,000 drivers operating in its fleet, with about 2 million app downloads since it was launched in 2016.

1...9,9849,9859,986...13,813 Page 9,985 of 13,813