IN BRIEF
Consumer outlook turns less bullish
CONSUMERS turned less less optimistic in the first quarter, compared to the fourth quarter, amid expectations of higher prices of goods and low income, results of the latest Consumer Expectations Survey conducted by the Bangko Sentral ng Pilipinas show. Results of the survey showed that while the consumer sentiment index remained in the positive territory, it dropped to 1.7 percent in the first quarter from 9.5 percent in the fourth quarter of 2017. It was also the lowest level since the third quarter of 2016. Respondents cited the higher prices of goods, low income and rise in household expenses as major reasons. They also mentioned the increase in household debts, occurrence of typhoon and other calamities and poor harvest. “The lower but positive consumer index indicates that the number of optimists decreased but continued to outnumber the pessimists,” Bangko Sentral assistant governor Francisco Dakila Jr. said in a news briefing. “The less optimistic consumer sentiment in Q1 2018 was carried to the near term and the next 12 months due to anticipation of continued increase in prices of goods that, in turn, increase household spending, as well as low earnings of the family,” he said. Julito G. Rada
Business
Group warns risks of quenched steel bars
THE Consumer Union of the Philippines raised concerns over the safety of Philippine manufactured steel bars which are used in the construction of high-rise buildings. CUP president Rodel Taton said in a forum at the Quezon City Sports Club he was shocked to hear Association of Structural Engineers chairman Emilio Morales’ warning that many buildings could collapse if a strong earthquake hit Metro Manila. The recent earthquake with a magnitude of 6.0 Richter scale that hit Hualien in Taiwan resulted in the collapse of many buildings and the death of a Filipino maid. “Condominium owners face risk of damage to their units, or possibly worse,” Taton said. He said since more than a decade ago, the formula and process of the manufacturing of steel bars were deliberately modified by local steel factories without informing the general public and the government. Taton said they were apparently misrepresenting these lower quality quenched steel bars as a higher grade for structural application. The inferior quenched steel bars are being sold to consumers, contractors and developers, without them knowing of the great danger they are exposed to, the group said. Quenching is the process of subjecting the hot steel bars to rapid cooling. This creates an outer layer skin that passes the tests conducted by Bureau of Philippine Standard of the Department of Trade and Industry. The group said tests done by the BPS did not expose the danger that could arise from the quenched steel bars which should not be welded, bended, threaded and galvanized.
BPI WINS ANVIL AWARDS. The Public
Relations Society of the Philippines, the country’s most prestigious public relations organization, gives Bank of the Philippine Islands five Anvil Awards for having demonstrated excellence in communications and public relations in five of its communications programs and projects. Shown during the 53rd Anvil Awards at ShangriLa Hotel at The Fort, Taguig City are some of the heads of various BPI groups, including BPI head of corporate affairs and communications Owen Cammayo (left) BPI Foundation managing director Maricris San Diego (fourth from left) and head of strategic marketing and decision support Cathy Santamaria (fifth from left), along with other members of the winning teams.
TUESDAY, MARCH 27, 2018
B1
By Jenniffer B. Austria
VIRTUAL TRADING PLATFORM. First Metro Securities Brokerage Corp., the stockbrokerage arm of the Metrobank Group, signs an agreement with Manila Tytana Colleges and Ateneo de Davao University to officially launch First Flight, a virtual trading platform for the Philippine Stock Exchange to be introduced to students under their finance programs. At the signing ceremony with Manila Tytana Colleges are (from left) MTC College of Accountancy and Management dean Maria Binuya, MTC president Sergio Cao, FirstMetroSec president Gonzalo Ordoñez and FirstMetroSec first vice president Mhelvin Abajon.
Grab confirms purchase of Uber’s Asean business R By Darwin G. Amojelar
IDESHARING service providers Grab and Uber announced Monday the merger of their operations in Southeast Asia including the Philippines, with Grab as the surviving entity, in the largest deal of its kind in the region.
Uber, a California-based company, started advising customers that it would “combine our operations with Grab to lead you in the next chapter of ridesharing in the Philippines and across Southeast Asia.” “What this means for you: we will be transitioning our services over to the Grab platform by April 8, 2018, so all requests after that date should be made from the Grab app. However, you can still use the Uber app in more than 80 countries around the world,” Uber said in the announcement.
The value of the deal, which Grab said was the largest ever acquisition by a Southeast Asian internet company, was not disclosed. The sale is Uber’s latest withdrawal from a market where it had faced tough competition, as new chief executive Dara Khosrowshahi seeks to stem huge losses and move past a series of scandals. Grab and Uber said in a joint statement the deal would integrate the ridesharing and food delivery business of Grab and Uber in the region into Grab’s existing multi-modal transportation and fintech platform. Singapore-based Grab said with the combined business, it would drive towards becoming the number one onlineto-offline mobile platform in Southeast Asia and a major player Grab said it would extend its leadership as the most cost efficient Southeast Asian platform, as it took over Uber’s operations and assets in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. As part of the acquisition, Uber will take a 27.5-percent stake in Grab and Khosrowshahi would join Grab’s board. “We are humbled that a company born
LRWC’s Boracay resort to attract Asian families THE planned Boracay resort to be developed through the partnership between Macau’s Galaxy Entertainment Group and Leisure and Resorts World Corp. is not a ‘mega casino’ as detractors claim, but a top leisure destination in Boracay targeting Asian families. LRWC said in a statement the integrated resort would redefine the standards of luxury resorts in the country with the bulk of its gross floor area allocated for premium hotel rooms and other amenities like wellness centers, bars, lounges and fine dining restaurants. GEG and local partner LRWC received a provisional gaming license to operate Boracay Philippines Resort and
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Megaworld’s net income in 2017 up by 13% to P12.8b
NGCP, DPWH set to align projects
GRID operator National Grid Corp. of the Philippines said it signed a memorandum of understanding with the Public Works Department to align and expedite current and future projects. The agreement was signed by NGCP officer-in-charge president and chief executive Anthony Almeda and the Public Works Secretary Mark Villar. “As both NGCP and DPWH are entities which spearhead nation building and national economic growth through infrastructure projects, it is imperative that we institutionalize our coordination efforts, align, and synchronize our project planning and execution,” NGCP said in a statement. “With the signing of the MOU, transmission projects can co-locate with national highways, bridges, and access road projects of the DPWH,” it said. Earlier meetings between the two organizations identified an initial list of 13 projects of DPWH which could be aligned and co-located with NGCP projects. The MOU will also pave way to exploring other possible projects according to the programs of DPWH and NGCP’s Transmission Development Plan. Alena Mae S. Flores
Ray S. Eñano, Editor Roderick T. dela Cruz, Assistant Editor
Leisure Corp., a $550-million integrated resort development in the popular tourist destination. Based on the resort’s conceptual design, the casino and gaming area’s maximum footprint will not exceed 7.5 percent of the total floor area of the resort “at all times”. “Thus, the planned Boracay Resort is expected to churn more revenues from the hotel and other ancillary businesses vis-a-vis the gaming segment as it attracts customers all over the region looking for luxury Asian destinations,” LRWC vice president for legal Katrina Nepomuceno said. She said GEG and LRWC were expected to leverage on Galaxy’s database
of clients across the region and the rest of Asia. She said they were targeting families and clients from Galaxy’s loyalty program to contribute approximately 50 percent of the customers, while other travelers to Boracay―Chinese tourists in particular―would account for the other half. LRWC said to minimize the resort’s impact and preserve the area’s natural beauty, the property would be constructed following the contours of the site with lots of open spaces and lush landscaping. The resort will be designed to provide ample space for all the comforts, luxuries and activities for each family member, it said.
in SEA has built one of the largest platforms that millions of consumers use daily and provides income opportunities to over 5 million people. Today’s acquisition marks the beginning of a new era,” Grab chief executive and co-founder Anthony Tan said. Tan said the combined business would be the leader in platform and cost efficiency in the region. “Together with Uber, we are now in an even better position to fulfill our promise to outserve our customers. Their trust in us as a transport brand allows us to look towards the next step as a company: improving people’s lives through food, payments and financial services,” he said. Khosrowshahi said the deal was a testament to Uber’s exceptional growth across Southeast Asia over the last five years. “It will help us double down on our plans for growth as we invest heavily in our products and technology to create the best customer experience on the planet. We’re excited to take this step with Anthony and his entire team at Grab, and look forward to Grab’s future in Southeast Asia,” she said. With AFP
Old plants, rising demand threaten PH power supply By Alena Mae S. Flores THE country’s aging power plants put the country’s power supply situation at risk, according to the Energy Department and power retailer Manila Electric Co. Energy Department director Mylene Capongcol said in a recent interview with CNN Philippines the age of the power plants, increasing demand and changes in temperature, were affecting power supply. Capongcol said the supply was at risk because of the “aging of the power plant, increasing demand, sudden increase or decrease in the temperature that affects the ambient performance of the power plant.” Capongcol said there was a need to put up more power plants to address the increasing demand and fill the gap of aging power plants. “From the DoE, we need to put in place an environment conducive to private sector participation, in generation and in the supply. Of course there should be a robust and strong transmission and distribution system,” she said. Capongcol said if there was not enough supply, the cost of power would increase. Meralco PowerGen Corp. president Rogelio Singson said about 33 percent of current capacity came from 20-yearold plants while 60 percent of the capacity was coming from 15-year-old facilities. He said aging or old plants tended to result in unexpected outages and needed constant maintenance.
MEGAWORLD Corp., the property unit of tycoon Andrew Tan, said net income attributable to its parent company climbed 12.7 percent in 2017 to P12.8 billion from P11.3 billion in 2017, led by the positive performance of the residential, office and commercial leasing businesses. Megaworld said in a disclosure to the stock exchange consolidated revenues rose 7.7 percent last year to P50.4 billion from P46.8 billion in 2016. Residential sales, which accounted for 70 percent of the group’s total revenues, expanded 4.5 percent to P11.8 billion from P10 billion. Rental business, which covers both office and commercial space leasing, grew at a faster rate of 18.2 percent to P11.8 billion in 2017 from P10 billion a year earlier. Megaworld earlier said it was expecting rental income to reach P20 billion by 2020 with a plan to add 1 million square meters of leasable space in its portfolio. “We are still way beyond our targets and we see this momentum to continue until we reach our P20-billion target in annual rental income by 2020, or even beyond that. There is still so much opportunities to tap in the property market and we are ready for that,” Megaworld senior vice president Francis Canuto said. The company said to sustain the growth momentum, it would allocate P60 billion for 2018 capital expenditures, of which 80 percent would be for the construction of mostly residential, office and commercial developments in various townships. The remaining 20 percent would be allotted for land acquisition and other investment properties. “The Megaworld Group is now present in more than 30 cities around the country. We will continue to be aggressive in developing more townships and integrated lifestyle communities across the country, most especially in the provinces,” Canuto said.
Cebu Pacific’s profit decreases 19% to P7.91b CEBU Air Inc., the operator of lowcost airlines Cebu Pacific and Cebgo, said net income fell 18.9 percent in 2017 from a year ago mostly because of higher jet fuel expenses. The airline company controlled by tycoon John Gokongwei said net income went down to P7.91 billion in 2017 from P9.75 billion in 2016. The group generated revenues of P68.02 billion in 2017, up 9.9 percent from P61.89 billion in 2016, as passenger revenues increased 7.2 percent to P49.93 billion from P46.59 billion. The company attributed the increase in revenue to the 3.2 percent growth in passenger volume to 19.7 million in 2017 from 19.1 million in 2016, driven by the 3.6-percent increase in number of flights as the group added more aircraft to its fleet. The number of aircraft increased from 57 in 2016 to 61 in 2017. Cebu Air said average fares increased 3.8 percent in 2017 to P2,529 from P2,436 in 2016, contributing to the increase in revenues. Cargo revenues went up 29.2 percent to P4.60 billion from P3.56 billion in 2016 following the increase in the cargo volume and yield in 2017. Ancillary revenues went up 14.9 percent to P13.49 billion from P11.74 billion, driven by improved online bookings, pricing adjustments and introduction of new ancillary revenue products and services. Operating expenses climbed 16.6 percent to P57.895 billion last year from P49.64 billion in 2016. Cebu Air blamed the higher operating expenses to the rise in fuel prices last year coupled with the weakening of the peso against the US dollar. The peso depreciated to an average of 50.40 per dollar last year from an average of 47.50 per dollar in 2016. Darwin G. Amojelar