MANILA, Philippines – The Big Chill Incorporated (TBCI), a subsidiary of publicly listed AgriNurture Incorporated, plans to raise P500 million to P600 million through an initial public offering (IPO) slated this year.

AgriNurture president and chief executive officer Antonio Tiu confirmed in a text message that the company will revive the proposed listing of TBCI.

TBCI owns iconic brands Big Chill and Fresh Bar. It also holds the franchise of Tully's Coffee in the Asia Pacific region.

Proceeds from the planned IPO will fund the company's expansion in China, as it plans to make the most out of improved bilateral relations between Manila and Beijing.

As part of the planned listing, AgriNurture notified its shareholders on Monday, January 23, that they would receive one warrant of TBCI, with a 5-year American Call Option that will expire on January 19, 2022. This is priced at par value of P1 each for every 2,000 shares of AgriNurture as of February 3, 2017.

It was in 2011 when AgriNurture acquired TBCI. It was also during that year when Tiu first announced plans to list its fruit shake chain with the Philippine Stock Exchange (PSE) through listing by way of introduction.

TBCI was established in 1994 as a new concept serving premium quality blended shakes made with 100% fresh-cut fruit. (READ: Sugarhouse, Big Chill fail to seal deal)

Its parent firm has served raw material to the food service sector in Asia for the last two decades, following its farm-to-plate model.

Fresh Bar, meanwhile, is an expanded concept of Big Chill which also offers fresh fruit shakes along with a line of gourmet soups, pasta offerings, fresh salads, and sandwiches.

AgriNurture, which is engaged in the trading and distribution of fresh fruits and vegetables in the Philippines, acquired TBCI in 2011 as part of its goal of becoming a global leader in providing nutrition from farm to plate.

TBCI is projected to generate revenues close to P5 billion a year.

To date, there are 8 brands in the TBCI roster, catering to a variety of market segments. – Rappler.com

MANILA, Philippines – The country's largest budget airline, Cebu Pacific Air, will launch two more routes coming from Cagayan de Oro City in March.

Starting March 15, Cebu Pacific said it will be flying 4 times weekly between Cagayan de Oro and Tagbilaran.

The Gokongwei-led carrier will also be flying 3 times weekly between Cagayan de Oro and Bacolod starting March 16.

"Both routes will be using the new ATR 72-600 aircraft that is expected to arrive in early March," Cebu Pacific said in a statement on Monday, January 23.

In line with the launch, the airline is offering an introductory P799 all-in seat sale, for travel between March 15, 2017 and May 31, 2017.

The introductory tickets can be booked from January 23 to January 27, or until seats last.

"These new routes will open great opportunities for everyjuan (everyone), both business and leisure travelers alike, enabling them to visit the Visayas region more conveniently. At the same time, passengers from Tagbilaran and Bacolod will now be able to explore Mindanao without the hassle, through the gateway that is Cagayan de Oro," said Alexander Lao, president and CEO of Cebgo.

After the sale period, Cebu Pacific said one-way fare from Cagayan de Oro to Tagbilaran is P1,235, while Cagayan de Oro to Bacolod is at P1,806. 

Cebu Pacific currently operates flights out of Manila, Cebu, Davao, Clark, Kalibo, and Iloilo. Its network covers 66 destinations with over 100 routes, spanning Asia, Australia, the Middle East, and the United States.

The airline's 57-strong fleet is comprised of 4 Airbus A319, 36 Airbus A320, 7 Airbus A330, 8 ATR 72-500, and 2 ATR 72-600.

Between 2017 and 2021, Cebu Pacific said it expects delivery of one more Airbus A320, 32 Airbus A321neo, and 14 ATR 72-600 aircraft. – Rappler.com

MANILA, Philippines – Around 450 plan holders of the defunct Pacific Plans Incorporated and its replacement company Abundance Providers and Entrepreneurs Corporation (APEC) on Monday, January 23 filed a syndicated estafa complaint with the Department of Justice (DOJ) against its top executives.

The group accused the respondents of 840 counts of "syndicated estafa by means of deceit," 840 counts of "syndicated estafa by abuse of confidence" and another 77 cases specific to Lifetime Plans only.

The complaint was filed by plan holders who formed a group called Pacific-APEC Plans Legal Complaint Group (PAP-LCG). The group was initially called the Pacific Plans Complaint Group, which listed 838 members.

"Our common aspiration is for us to be able to regain what we lost because of the way our money were managed by the Yuchengo businesses," one of the complaints said.

The complainant who requested anonymity said she was just offered P1,400 for his P100,000 pension plan.

Another plan holder who invested about P6 million for various top level educational and pension plans for his family was offered P400,000 as settlement.

"They offered me P400,000 for my investment," the plan holder who also asked not to be named said. "Not only is it a farce, it is also a huge insult," the complainant added.

"We are focusing all our efforts to delivering this case to court and getting the justice the disenfranchised plan holders deserve," Joshua Santiago, legal counsel of PAP-LCG, said.

The group said that in June 2004, Pacific Plans unilaterally transferred the assets and liabilities of its pension, memorial, and fixed-value educational plans to a new company, Lifetime Plans.

"Two months later, Lifetime Plans sold its stake in Pacific Plans to GPL Holdings Incorporated, which is another Yuchengco family company for the declared book value," the group added.

In early 2009, GPL Holdings then sold Pacific Plans to businessman Noel Oñate, who bought it for P250 million.

The complainants said they were only informed of the takeover through letters sent via mail, which they considered "highly suspicious."

First case lost

The class suit by the Pacific-APEC Plans Legal Complaint Group is not the first time plan holders have tried to recover their "lost investments."

In 2009, Parents Enabling Parents Coalition (PEP), a group of plan holders led by filed by Victoria Gomez-Jacinto, also filed a case against the Yuchengcos.

The PEP group accused the Yuchengcos of defrauding "at least 34,000 plan holders by inducing them to purchase open-ended educational plans based on their false pretense that they have the capability and the willingness to assume the risks inherent in contracts of this nature, which they now refuse to do so."

The PEP, however, lost the case after the DOJ found no probable cause to indict the Yuchengcos for syndicated estafa.

The DOJ held that the PEP failed to "failed to prove that respondents committed any unlawful act or carry out transaction of soliciting funds from the general public by way of investments through fraudulent scheme."

The DOJ explained that since many of the Pacific Plans clients had benefited from their plans, "it cannot be gainsaid that PPI (Pacific Plans) merely solicited funds from the general public in the guise of education plans without any intention of honoring the same."

"Most of us are vendors, school teachers, domestic helpers and ordinary employees, and we were tricked out of shelling out up to P100,000 over 15 years, with the promise that we would receive triple the amount when the time comes to retire, or our children went to college or for treatment of illnesses due to old age," the PAP-LCG said in a statement. – Rappler.com

MANILA, Philippines – The administration of President Rodrigo Duterte has finally rolled out its first public-private partnership (PPP) venture: the operations, maintenance, and upgrade of 5 unbundled regional airports in Bacolod, Davao, Iloilo, Laguindingan, and Bohol.

In a newspaper notice on Tuesday, January 24, the Department of Transportation (DOTr) invited prospective bidders to participate in the auction of the following airport PPP projects: the P20.26-billion Bacolod-Silay Airport, the P30.40-billion Iloilo Airport; the P40.57-billion Davao Airport, the P14.62-billion Laguindingan Airport; and the P2.34-billion New Bohol (Panglao) Airport.

"Bidding is open to all interested bidders, whether local or foreign, subject to conditions for eligibility under the invitation documents, build-operate-transfer law, and other existing laws," the department said in the notice.

Only those new bidders who bought the new invitation documents for the specific airport will be allowed to participate in the pre-qualification and bidding stages of the PPP projects. (READ: PH sticks to bundled plan for 5 airports)

The cost of the invitation documents is a non-refundable fee of P300,000, the notice showed.

These 5 airport PPP deals – cumulatively worth some P108.9 billion – were previously rolled out under the administration of former president Benigno Aquino III.

But the Aquino administration failed to bid out the PPP airport projects, which were bundled in two packages.

The Duterte administration then decided to unbundle the airports and bid these out individually.

Renewed interest from the consortia

The transportation department said that previously pre-qualifiied bidders in the bundled airport project are considered pre-qualified in these unbundled deals, provided that there are no changes in their legal, technical, and financial capacity.

The 5 consortia that were pre-qualified during the first auction for these airport deals are the following: 

• Philippine Airports Consortium, which includes Metro Pacific Investments Corporation (MPIC), Aeroports de Paris, and ADP Ingenierie
• consortium of San Miguel Holdings Corporation and Incheon International Airport Corporation
• GMR Infrastructure Limited-Megawide Construction Corporation group
• consortium of Aboitiz Equity Ventures Incorporated and VINCI Airports SAS
• the group of Filinvest Development Corporation, Japan Airport Terminal Company Limited, and Sojitz Corporation

Even if these projects were unbundled, these regional airport PPP deals continue to lure big investors.

"Whatever they (government) do, we will bid," San Miguel Corporation President Ramon Ang told reporters last week in Filipino.

Filinvest, on the other hand, was quoted in BusinessWorld as saying that its consortium remains interested in these projects.

Metro Pacific Chairman Manuel Pangilinan had also said his company remains keen on regional airport development projects.

For AC Infrastructure Holdings Corporation, a subsidiary of Ayala Corporation, it will not bid for the regional projects as it turns its attention to the Ninoy Aquino International Airport (NAIA) Development project.

"We won't bid for the regional airports because we have to concentrate on NAIA PPP," AC Infrastructure President and CEO Rene Almendras said on the sidelines of an event in Makati on Tuesday, January 24.

For the transportation department, these PPP projects are aimed at improving the services of the regional airports by allowing private sector partners to handle the operation and maintenance of these airports as well as the enhancement of these airports' airside and landside facilities.

"This is in line with the government's plan to develop international gateways in the countryside," the department said. – Rappler.com

MANILA, Philippines – Ayala Foundation Incorporated, the social development arm Ayala group of companies, will build a 70-bed drug rehabilitation facility in Marawi City, Lanao del Sur.

To be called Siyapen, the Maranao word for care,  the Autonomous Region in Muslim Mindanao's (ARMM) first in-patient facility can accommodate drug dependents undergoing outpatient care.

The center will occupy an existing building owned by the Marawi City government. (READ: LIST: Where are drug treatment and rehab centers in the Philippines?)

Ayala Foundation will oversee the refurbishment of the structure through the Makati Development Corporation, the construction arm of Ayala Land Incorporated.

Ayala Foundation President Ruel Maranan said in a briefing in Makati City that his company will provide seed funding for the first year of operations of the Siyapen Center, which will be built from from January to April this year.

"The Siyapen drug rehabilitation center is our way of addressing another challlenge Mindanao faces, and of responding to the national government's call for private sector in addressing the drug problem," said Ayala Foundation Co-Chairman Jaime Augusto Zobel de Ayala.

"We have always believed that, whether in Mindanao or elsewhere in our archipelago, fostering inclusive development will always require collaboration between the government and the private sector," he added.

During the briefing, Marawi City Mayor Majul Gandamra said that according to the Philippine National Police, at least 471 persons voluntarily surrendered to the local police  as of November 22, 2016.

Once completed, the Siyapen Center will be turned over to the city government.

Other than Ayala, firms that have vowed to build drug rehabilitation centers in the country are San Miguel Corporation and Alliance Global Group Incorporated.

Chinese businessman and philanthropist Huang Rulun donated a 10,000-bed mega drug treatment and rehabilitation center in Fort Magsaysay, Nueva Ecija.

President Rodrigo Duterte has waged an all-out campaign against illegal drugs since he assumed office.

From July 1, 2016, to January 22, 2017, there have been over 7,000 deaths linked to the "war on drugs" – both from legitimate police operations and vigilante-style or unexplained killings. (READ: IN NUMBERS: The Philippines' 'war on drugs') – Rappler.com

MANILA, Philippines – Philippine President Rodrigo Duterte called on the Association of Southeast Asian Nations (ASEAN) to help micro, small, and medium enterprises (MSMEs) and to empower women to take more active roles in their economies.

Duterte joined Trade Secretary Ramon Lopez, other government officials, and ambassadors at the launch of the ASEAN 2017 Business and Investment Program at the Malacañang Palace. The Philippines, as chairman of the regional bloc this year, is hosting ASEAN 2017 events.

Duterte said encouraging the growth of businesses all over ASEAN is necessary for creating prosperity in the region. Southeast Asian entrepreneurs should take advantage of the burgeoning economies in ASEAN.

"Our ASEAN today presents many real opportunities for investments to grow, for investors within and outside our region. ASEAN needs to sustain its momentum towards inclusive growth, ensure businesses and industries continue to thrive, and secure a policy that supports meaningful economic change and reform," said Duterte.  

As ASEAN 2017 host, the Philippines will focus on helping MSMEs "that form the backbone of the ASEAN’s collective economy," said the President.

"I encourage business leaders to tap the MSMEs and help them integrate into the national, regional value chain," said Duterte.

MSMEs are the major source of employment in ASEAN, according to the Department of Trade and Industry.

Duterte also highlighted efforts to empower women more so they take more active roles in ASEAN economies.

"The objective is to achieve the full economic potentials of women and to bridge the gender gap. Figures from study show that advancing gender equality will result in US$900 billion additional output to east and west Asian economies in 2025. In ASEAN, we will go beyond that and focus on achieving the equity and justice that all our women deserve," he said.

The Philippines will be hosting 9 fora geared toward helping ASEAN entrepreneurs, start-ups, and investors.

Duterte encouraged entrepreneurs, businessmen, and investors to attend these events.

The schedule of events is as follows: 

• April 28-29 - ASEAN MSMEs-Mentors and Enablers Conference
• April 24-27 - ASEAN Creative Cities Forum and Exhibition Trade Exhibit
• May 19-21 - Taste ASEAN @ IFEX Philippines
• August 28-September 1 - ASEAN Women’s Business Conference
• September 7 - Inclusive Business Summit
• September 7-9 - 2nd ASEAN Young Entrepreneurs Carnival
• October 20 - Slingshot ASEAN
• October 20-22 - Creative Market Place
• November 14 - ASEAN MSME Summit 

Aside from assisting MSMEs, Duterte said the Philippine chairmanship will focus on reducing cost of doing business in the region, improving and harmonizing safety standards for products and services, and helping develop innovation-driven economies.

ASEAN is now the 3rd largest market in the world with over 620 million people. It is the 7th largest economy with a combined GDP worth US$2.3 trillion.– Rappler.com

MANILA, Philippines – The Philippines is expected to remain the fastest-growing economy in the Association of Southeast Asian Nations 6 (ASEAN-6) this year, thanks to rising infrastructure spending and domestic demand, said economists of Standard Chartered Global Research.

The bank's research team expects the Philippine economy to grow by 6.9% in 2016, and by 6.7% in 2017, fueled by the growing middle class, the boom in the business process outsourcing (BPO) industry, and the boost in public infrastructure spending.

"Infrastructure spending to come on board even more in 2017. Services sector, as always, is strong in 2016, 2017, and medium term," Chidu Narayanan, economist for Standard Chartered Asia, said in a media briefing in Makati City on Wednesday, January 25. (READ: PH economy to stand out in Asia in 2017 – HSBC)

But from 2018 to 2020, economists said Vietnam is seen to outgrow the Philippines in terms of gross domestic product (GDP) growth in the ASEAN-6. (READ: PH economy seen to grow 'as much as 8%' in 2017)

Asked why the bank sees a slowdown in the country's economic growth, Narayanan replied: "It is still very fast. [It's] above expectations from the market."

"Growth possibility is a bit slower than last year – headwinds, global issues. But the average is still very high. It's much faster than what has been the average of the last 5 years before 2016," he added.

The Philippines' GDP growth in 2016 will be released by the Philippine Statistics Authority on Thursday, January 26.

The country's GDP grew by 7.1% in the 3rd quarter of 2016.

The Philippines was the fastest-growing major Asian economy in the first half of 2016, with its economic growth even outpacing Asian giant China. 

Meanwhile, Standard Chartered Asia FX strategist Diva Devesh said the Philippine peso will likely trade above P50 during the 2nd quarter of 2017, before closing around P50.50 against the US dollar by the end of the year.– Rappler.com

MANILA, Philippines – Finance Secretary Carlos Dominguez III ordered the Bureau of Internal Revenue (BIR) to step up efforts against tax evasion, following the agency's probe into fake cigarette tax stamps allegedly used by Mighty Corporation and other tobacco manufacturers.

In a statement on Wednesday, January 25, Dominguez said BIR Commissioner Caesar Dulay did the "right thing" in ordering an investigation into the alleged use by certain tobacco manufacturers of fake tax stamps on their cigarette packs. 

"Commissioner Dulay did the right thing in ordering an investigation after receiving field reports from our revenue officials on the illegal practices of certain tobacco companies," said Dominguez.

"This is a matter of serious concern and I'm instructing the BIR to tighten monitoring and enforcement." (READ: Duterte to name big tax evaders next)

Mighty said in a statement, however, that it has not been using fake tax stamps. It even asked the BIR to investigate other multinational firms for possible tax evasion.

Last December, teams from the BIR and the Bureau of Customs (BOC) had seized fake cigarettes worth over P1 billion, fake tax stamps worth about P175 million in taxes, raw materials, machines for cigarette manufacturing, and other paraphernalia in separate raids in Pangasinan, Pampanga, and Bulacan. 

Dominguez had lauded the BIR and the BOC for intensifying their campaign against the illicit tobacco trade.

"These sustained efforts show that the Duterte administration's campaign against corruption and other illegal activities would be pursued with the same zeal as its war against narco traffickers and illegal drugs," he added.

Illicit tobacco trade

In a report to Dominguez, the BIR said last month that it had shut down the premises of an unauthorized manufacturer of various cigarette brands in Lubao, Pampanga, and confiscated "5.5 million pieces of fake unused cigarette strip stamps worth approximately P175 million in excise taxes and VAT (value added tax)."

"The machines and other materials for tobacco manufacture were put under the custody of the NTA (National Tobacco Administration)," BIR Regional Director Jethro Sabarriaga said in his report to Dulay. (READ: Duterte to corrupt BOC, BIR employees: I'm watching you)

According to Sabarriaga, the owner of the feed mill where the raid was conducted had registered with the BIR as a hog mill feed operator in October 2016. 

"The machines seized are capable of producing 200,000 packs of cigarettes per day and supplies and stamps in warehouse are estimated to be good for one month's production. The stamps appear to be imported and with Chinese characters," Sabarriaga said.

In a separate report to Dominguez, the BOC said last month it had raided a facility in Marilao, Bulacan where unlicensed raw materials for cigarette production, including over 500 boxes of cigarette filters, 100 sacks of tobacco leaves, reels of inner liner, cigarette paper, and packing film, were found. 

Customs Commissioner Nicanor Faeldon also said 4 warehouses in Villasis, Pangasinan found to be counterfeiting popular cigarette brands were raided, leading to the arrest of 24 undocumented foreigners and the confiscation of various materials for cigarette manufacturing.

The BOC has also seized counterfeit labels of cigarette brands manufactured by Philip Morris Fortune Tobacco Corporation (PMFTC) and arrested a certain Jayson Enero Li. – Rappler.com

MANILA, Philippines (UPDATED) – In another election year, the Philippines ended 2016 with a strong 6.8% economic growth. It remains one of Asia's fastest-growing economies, ahead of China's 6.7% and fellow high-riser Vietnam's 6.2%. India has not released its full-year data yet. 

Mainstay household consumption, fueled by low interest rates, still benign inflation, remittance flows, and higher incomes continued to be the main drivers of the Philippines' growth. 

Weather disruptions remained a roadblock, however, as the dismal performance of the agriculture sector pulled down the 4th quarter growth by 0.1 percentage point. Typhoon Karen (Sarika) and Super Typhoon Lawin (Haima) slowed down the pace of growth to 6.6% in October to December from the previous quarter's 7%.

"We are deeply concerned about the contraction of the crops sector in the 4th quarter following a contraction the previous year.  More disturbing is the performance of the fishery subsector that remained in negative territory for almost 7 years now, except only in 2013," Socioeconomic Planning Secretary Ernesto Pernia said in a press conference.  

Despite the typhoons in the last months of 2016, the Philippines remained among the region's top performers but slid to the 3rd spot as Vietnam's 6.7% overtook the Philippines for the first time in 2016.

The full-year growth of 6.8% and 4th quarter growth of 6.6% were "in line with market expectations," Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr told reporters in a mobile phone reply.

"The government thrust on infrastructure spending should provide a solid base for the economy to meet the 2017 growth target. The inflation outlook also remains manageable. Thus, there is no real pressing need to deviate from [the] current stance of monetary policy," he added. 

Tetangco said the BSP continues to monitor external developments that may affect its growth dynamics and financial markets. "We will adjust policy levers as and when necessary."

Expectations in the coming years

For Bank of the Philippine Islands (BPI) associate economist Nicholas Antonio Mapa, the Philippines can expect growth to carry on its "robust trend of above 6%," with household consumption and consumption-related investment seen to carry the load.

"Government spending, long the missing link to the Philippine growth story, continued to lend its hand to expansion, helping boost the overall print," Mapa said in an email.

But the economist noted that the steady pace of government spending was not met by a commensurate increase in revenue collection, which may be tolerated in the near term but may be credit negative in the medium term. 

"The trade deficit continues to widen to historical levels as imports sustain their binge while exports continued to languish in 2016. Meanwhile, remittances, which account for roughly 9% of the economy, is expected to post a flat growth for the full year," he added. – Rappler.com 

MANILA, Philippines – President Rodrigo Duterte inherited an economy that's on a roll. After decades of erratic growth as the tiger economies in the region roared, it seems the Philippines has hit its stride and is growling on its own. 

From 2010 to 2016, the economy, as measured by the GDP, grew by an average of 6.3%. It hit growth rates higher than 7% at least twice the last 6 years, and performed better than most countries in Asia, even overtaking China's for the first 9 months in 2016 – despite being hit by some of the most powerful typhoons ever recorded.

In the past administration, under President Benigno Aquino III, the economy stabilized and, since 2010, grew faster than '90's-era peer countries, Thailand and Malaysia. Although these neighbors remain more prosperous, their economies struggled under leadership transition issues and political scandals. 

Aquino turned over to Duterte an economy that had benefited from reforms in governance and transparency, as well as fiscal and budgetary reforms, which started under Aquino's predecessor, President Gloria Macapagal Arroyo. 

In 2016, the year Duterte took over after winning the elections in May, the economy grew 6.8%. It's a stellar performance not yet be fully attributed to Duterte. 

"Growth momentum is there until 2017," noted ING Bank senior economist Joey Cuyegkeng at an economic forum in May, referring to the driving force gained during the Aquino years. "But beyond that, the management of the new leader (Duterte) will have a key role."

The country's economy is in good hands, assured Duterte's economic team. They are looking at 6.5% to 7.5% growth rate in 2017, and a stronger 7% to 8% in the coming years. 

"This would mean that, over the next 6 years, the economy will expand by about 50% in real terms, and per capita income will rise by over 40%. This should bring us to the upper-middle income category standing by 2022," Socioeconomic Planning Secretary Ernesto Pernia said on Thursday, January 26. 

The economic team is banking on various legs of growth, with infrastructure spending among the priorities. Duterte's term will be "The Golden Age of Infrastructure," a term first mentioned by Budget Secretary Benjamin Diokno. An infrastructure binge, as anyone who has spent hours trying to ply Manila's roads knows, is badly needed. 

With some projects also directed to regions outside the capital, the new government has pledged to push spending on infrastructure to 7% of GDP.

It's a promise that excites those who are monitoring the country's prospects. "Infrastructure spending [is expected] to come on board even more in 2017," Chidu Narayanan, economist for Standard Chartered Asia, cited in media briefing earlier this week. 

To fund the increased expenditure, Finance Secretary Carlos Dominguez has led efforts to set in motion a broad tax reform package, which in turn is a key component of Duterte's 10-point socioeconomic agenda. 

The agenda has been praised by most observers, although credit watchers  Moody’s and Standard and Poor’s, though broadly positive on the economy’s prospects, have also warned about increased political risk.

"Progress on the agenda could ultimately depend on how the President deploys his considerable political capital; a sustained focus on political matters could detract attention away from economic and fiscal reform," Moody's said in a report last year that maintained the country's investment grade rating. 

Uncertainties have hounded Duterte's early months in office as the firebrand president, the first from Mindanao, spewed out expletives against world leaders and announced a pivot to China.

Pernia acknowledged that there are factors outside their control. Among others, the "America First" policy of United States President Donald Trump is bringing uncertainty to the business process outsourcing (BPO) and other export sectors in the Philippines. The US is among the country's top trading partners and home to top BPO clients. Revenues from the latter is a major complement to remittance flows, which account for about 10% of the Philippines' GDP. 

These possible policy shifts in the US is among the "potential downside risks" that the Duterte government needs to be vigilant about for "potential repercussions to the Philippine economy," Pernia noted. – with research by Sofia Tomacruz/Rappler.com

NEW YORK CITY, USA – The Dow Jones Industrial Average, the most famous equity index benchmark on Wall Street, shot above 20,000 for the first time Wednesday, January 25.

The blue-chip stock index quickly blew through the much-anticipated milestone in the opening seconds of trading and rose further as the day progressed. It closed at 20,068.51, up 0.8%.

The new record, which helped spur other leading global stock indices higher, culminates a US rally begun in the wake of US President Donald Trump's election, in anticipation he will produce pro-growth policies, but which stalled in the weeks leading up to the inauguration.

The surge was the latest sign that investors are brushing aside worries about Trump's bent towards trade protectionism and divisive social policies as it fixates on expectations the White House and Republican Congress will produce tax cuts, infrastructure spending, and reduced regulations.

The broad-based S&P 500 also rose 0.8% to 2,298.37, while the tech-rich Nasdaq Composite Index advanced 1.0% to 5,656.34, both new records.

Equity markets in Frankfurt, Paris and Tokyo all gained 1.0% or more. Gains in London were a more modest 0.2% as the British pound advanced. 

Sam Stovall, chief investment strategist at research firm CFRA, said it was a "monumental day," and though Wall Street could retreat somewhat, it would not fall sharply.

"I think people are feeling encouraged by (Trump's) actions to date," Stovall said.

JJ Kinahan, chief market strategist at TD Ameritrade, hailed the news, posting a picture to his Twitter account showing him toasting "Dow 20K" with a glass of champagne and fireworks in the background, although the milestone may be largely symbolic.

"It's exciting, but in the grand scheme, I don't think it means much," Kinahan said.

Key gainers in the 30-member Dow included Boeing, which rose 4.2% after reporting better-than-expected fourth-quarter earnings; and Caterpillar, which gained 2.0% ahead of its earnings report Thursday, January 26. United Technologies, which slightly beat expectations, fell 0.6%.

Bullish momentum returns

In crossing the 20,000 threshold after many failed tries, the market regained its mojo after the post-election rally stalled. 

Analysts said the shift was triggered by Trump's announcements Tuesday, January 24, to advance two major pipeline projects that had been blocked by former president Barack Obama.

Investors also are excited about tax cuts, which could have a direct impact on lifting corporate profits, and enhanced public works spending, which could boost US growth.

Briefing.com analyst Patrick O'Hare said the rally also spurred more stock buying by investors who were caught off guard in what he dubbed "FOMO" or the "fear of missing out."

The latest milestone follows a series of landmarks reached during the Obama years, which were characterized by slow but steady economic growth after the 2008 financial crisis. The blue-chip index bottomed out in September 2009, falling below 6,600 points.

Market shrugs at controversy

The renewed market confidence suggests investors are shrugging off worries about Trump, including fears he will ignite a trade war with protectionist policies.

On Wednesday afternoon, Trump ordered work to begin on a wall on the Mexican border to keep out immigrants, moving to fulfill a campaign promise that pleased his political base but has been criticized as unnecessary and mean-spirited, as well as a misuse of funds.

But Kinahan said some of Trump's controversial policies, such as trade protectionism, may be "bargaining chips" as his agenda moves through Washington.

"He's been in real estate his whole life so he's all about compromise," he said. "The more things you throw out, the more bargaining chips you have.

Kinahan said investors also are hedging in case the market pulls back, a shift that is most visible in the popularity of "put" options that stocks will fall. – Rappler.com

MANILA, Philippines – With the country's friendlier ties with China, more Chinese tourists are coming to the Philippines.

The chief of the National Economic and Development Authority (NEDA) revealed on Thursday, January 26, that the number of Chinese applying for a tourist visa to the Philippines has surged by 250% to 1,400 daily. (READ: Duterte: You'll see me more often in China)

"We were informed in China by the Philippine Embassy that applications for visa to the Philippines has really shot up from 400 a day now it's about 1,400 a day, meaning that Chinese tourists are going to be coming in groves starting with the warming of relations and at least throughout the Duterte administration and hopefully beyond," NEDA Director-General Ernesto Pernia said in a briefing.

Pernia attributed this to the improved diplomatic relations between the Philippines and China since Duterte's state visit to Beijing in October 2016, leading to the lifting of Chinese restrictions on travel to the Philippines.

Latest available data from the Department of Tourism (DOT) show China is the 3rd largest contributor of foreign visitors to the country, totalling 630,327 in November 2016, trailing behind Korea's 1,331,701 and the United States' 771,849. (READ: IN NUMBERS: Philippines-China relations)

Chinese Ambassador to the Philippines Zhao Jianhua had said in a statement that he expects one million tourists from China to visit the Philippines in 2017.

Philippine Tourism Secretary Wanda Teo said Zhao's forecast is consistent with the DOT's goal to attract at least 7 million international visitors this year.

More infra partnerships

Aside from the rising number of Chinese tourists in the country, another effect of the improved ties between the Philippines and China is the increased loan assistance for several infrastructure projects. (READ: Ties with China to fill infra spending gap, pose risk to PPP)

A Philippine delegation led by Finance Secretary Carlos Dominguez III has submitted a total of 40 "large and small" infrastructure projects to China for possible loan financing and assistance in conducting feasibility studies. Further talks on these proposals will take place in Manila in February.

Dominguez said the meeting of the high-level Philippine team with officials of China's Commerce Ministry was a "productive first step towards achieving the desire of (Duterte and Chinese President Xi Jinping) in further reinforcing ties between the two countries." 

Of the 40 projects, 15 are being proposed for loan financing, while another 25 are for feasibility study support.

Because of this policy direction, Philippine contractors are eyeing up to $100 billion worth of infrastructure deals with Chinese companies. – Rappler.com

MANILA, Philippines – The country's inflation rate will likely be between 2.3% and 3.2% in January, the Bangko Sentral ng Pilipinas (BSP) said, noting that higher oil prices and its spillover effects are seen to offset downward price pressures.

"The BSP forecast suggests that January inflation could settle within the 2.3%-3.2% range. Downward price pressures include a slight decline in rice prices and lower power rates in Meralco-serviced areas," BSP Governor Amando Tetangco Jr told reporters in a text message on Thursday, January 26.

But higher domestic prices of gasoline, diesel, and LPG as well as the excise tax adjustments for alcoholic beverages and tobacco products would likely exert upside pressures on prices of basic goods and services during the month, Tetangco added.

In effect, this will likely hurt Filipinos' consumer spending, according to the National Economic and Development Authority (NEDA).

"Anything that is more expensive, we buy less of it. Consumer goods spending will probably be less brisk with higher inflation," NEDA Director-General Ernesto Pernia said in a separate briefing in Makati City early this month.

Moving forward, Tetangco said the BSP will continue to monitor emerging price conditions to ensure price stability "conducive to balanced and sustainable economic growth."

Full-year inflation for 2016 settled at 1.8%, which is its lowest in 29 years. Inflation last December quickened to 2.6%, the fastest in 2016.

This was because in December, the rate per kilowatt hour (kWh) of the Manila Electric Company (Meralco) for an average of 300 kilowatts-per-month consumption slightly increased to P8.70 from P8.60 in November.

Meralco's generation rate per kWh also increased to P3.90 in December from P3.80 in November, but still below P4.10 in 2015.

Also, the average price of diesel in Metro Manila among the "big 3" oil companies jumped to P29.10 per liter in December from P27.30 in November, which is also higher than the P23.90 registered in the same month in 2015. – Rappler.com

MANILA, Philippines – Philippine stocks and the peso ended flat on Thursday, January 26, as the "expected" gross domestic product (GDP) data for the full-year 2016 failed to boost investor sentiment, economists said.

The bellwether Philippine Stock Exchange index (PSEi) inched up by 9.28 points or 0.13%, closing at 7,332.64 points.

The peso, meanwhile, slighly strengthened against the dollar, gaining 0.05 centavos to P49.805:$1 when the market closed on Thursday at 4:30 pm.

"Markets traded rather flat as the 2016 GDP came out within expectations this morning," Luis Limlingan, managing director of Regina Capital Development Corporation, said in a mobile phone message on Thursday.

The Philippines ended 2016 with a strong 6.8% economic growth. 

"Some slight bargain hunting was observed mainly owing to the fact that US stocks recorded a trifecta of all-time highs on Wednesday," Limlingan said.

The Dow Jones Industrial Average, the most famous equity index benchmark on Wall Street, shot above 20,000 for the first time on Wednesday, January 25.

Q4 GDP 'weaker than expected'

For Land Bank of the Philippines market economist Guian Angelo Dumalagan, the peso appreciated slightly today, as weaker-than-expected Philippine GDP growth in the 4th quarter "failed to completely erase the local currency's early gain as a result of President Donald Trump's protectionist approach to trade."

Although the Philippine economy finished strongly, the country's GDP growth closed at 6.6% in the 4th quarter of 2016, which was slower than the 3rd quarter's 7%. (READ: Under Duterte, is PH economy in good hands?)

"The PSE index also declined initially after the weak growth report, but it eventually recovered perhaps because investors continue to have confidence in the Philippine economy," Dumalagan said.

For Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr, the full-year growth of 6.8% and 4th quarter growth of 6.6% were both "in line with market expectations." 

"The government thrust on infrastructure spending should provide a solid base for the economy to meet the 2017 growth target. The inflation outlook also remains manageable. Thus, there is no real pressing need to deviate from [the] current stance of monetary policy," Tetangco said.

Value turnover grew to P7.021 billion as over 2.701 billion shares changed hands.

Data from the PSE showed that net foreign selling was recorded at P309.979 million during the session. – Rappler.com

WASHINGTON, DC, USA – Greece's government debt remains "highly unsustainable," and will be "explosive" in the longer run, requiring a more credible debt relief plan from Europe, the International Monetary Fund said in a report obtained by Agence France-Presse.

Addressing the debt burden of the beleaguered nation will require "significant debt relief" from European institutions, including dramatically extending the grace periods and maturities of the loans, the IMF said in it's annual report on the Greek economy, which includes a debt sustainability analysis.

The IMF board is due to discuss the report February 6.

Even with full implementation of the economic reforms the country has agreed to, "Greece's debt is highly unsustainable" and "will become explosive in the long run," as the government will have to replace highly-subsidized official financing with market financing at much higher rates, the IMF said.

The pessimistic report, though in keeping with the fund's repeated statements on the topic, makes it more unlikely the IMF stays on the sidelines of any new European loan deal for Greece.

Months of bickering have delayed progress of Greece's 86-billion-euro ($92.4 billion) bailout program agreed in 2015 and officials increasingly are worried that elections this year in the Netherlands, France and Germany could further poison any progress.

The IMF report says that in order to "provide more credibility to the debt strategy for Greece, further specificity will be needed regarding the type and scope of debt relief to be expected" from Europe.

This must include "ambitious extensions of grace and maturity periods, a full deferral of interest on European loans, as well as a locking in of the interest rate on a significant amount of European loans ... to put debt on a sustained downward path."

The IMF calls for extending the grace period until 2040, during which time no debt payments would be required, and extending the maturity of the loans to 30 years in some cases to 2070, dramatically longer than what Europe agreed to in 2012.

At the heart of the dispute over the new loan program is a demand by the eurozone that Greece deliver a primary balance, or surplus on public spending before debt repayments, of 3.5% of GDP, far in excess of the 1.5% the IMF says is feasible.

The target is very high – and most countries do not even come close – but Germany and other eurozone hardliners are insistent that Greece reach it for several years after its current program concludes in 2018.

Eurogroup head Jeroen Dijsselbloem insisted on Thursday, January 26, that the IMF remained committed to the Greek bailout program, despite repeated calls by the IMF for more realistic targets and more debt relief. – Rappler.com

WASHINGTON, USA – President Donald Trump's plans to upend US trade policy with import tariffs and new negotiations, slash taxes, and spend on infrastructure makes the Federal Reserve's work more challenging this week.

Since his election in November, Trump's pronouncements have left US central bankers guessing and citing the "considerable uncertainty" for monetary policy until they turn into specific policies.

Fed members have raised the possibility they may have to increase interest rates faster than they had planned before Trump's surprise election victory, and have said they will be watching for the new administration's policies.

But meanwhile, economists say that when the policy-setting Federal Open Market Committee gathers in Washington Tuesday and Wednesday, January 31 and February 1, to review monetary policy, it is likely to stand pat, as the outcome of any new Trump fiscal and trade moves remains far off.

"My guess is there won't be any action," said Edwin Truman, a former FOMC staff economist now at the Peterson Institute for International Economics in Washington.

"The outlook looks a bit stronger, both in the United States and the world," he told AFP. "But as for the shape of fiscal policy ... we don't really know a lot more than we did in December."

The Fed in December raised rates for only the second time in a decade, increasing the target range by a quarter point to 0.5-0.75% to help head off inflation as the somewhat sluggish recovery from the Great Recession continues.

The odds of another increase remain below 40% until the 3rd meeting of the year in May, according to Fed fund futures markets. 

US central bankers have made clear that despite the fairly tepid recovery, the economy appears to be on track to achieve its primary goals of full employment and 2% inflation.

The unemployment rate has remained under 5% and job creation has been steady at an average of 165,000 new positions a month. Despite years of low inflation, the Fed's favored price measure, the personal consumption expenditures index, has been trending up slowly.

However, economic growth slowed sharply in the final quarter of last year, pulling 2016 growth down to 1.6%, the lowest since 2011.

New FOMC voters

Adding another wrinkle to the attempts to gauge how the Fed will react, the composition of the Federal Open Market Committee will change as it always does at the first meeting of the year, and this time will include 3 first-time voters.

The change might mean the committee could become less hawkish than it was in 2016, when Esther George of the Kansas City Fed dissented at 6 of last year's 8 Fed meetings to vote in favor of rate hikes. The Boston Fed's Eric Rosengren dissented in September, while Cleveland's Loretta Mester dissented in September and November.

Those 3 will be replaced by some of the newest Fed officials: Patrick Harker, head of the Philadelphia Fed bank, Neel Kashkari of Minneapolis, and Robert Kaplan of Dallas. 

Fed Chair Janet Yellen has said the economy is on course to meet the Fed's targets for inflation and full employment, but the central bank will be watching to see what policies the administration pursues. She has said spending to increase productivity would be welcome, since that would increase growth without driving inflation.

Trump's new policies could affect the Fed's path but "at this point, however, the size, timing, and composition of such changes remain uncertain," she said in a recent speech.

Trump's big 'meh'

Jared Bernstein of the Center on Budget and Policy Priorities said that while Wall Street had rallied since the election, Americans were beginning to understand that any direct influence from Trump on the economy was most likely to occur further down the road.

"Market participants continue to take Donald Trump way too seriously in terms of fiscal policy," he said.

"Yes, there's going to be a tax cut. The earliest it's going to kick in is 2018," Bernstein told AFP. "An infrastructure plan is a big question mark. House Republicans see it as a big 'meh.'"

"The Fed has understood this, maybe because they're here in DC and they're not quite as excitable."

Tim Duy, an economist at the University of Oregon and close observer of the Fed, said the uncertainty that Trump had created was still weighing on policymakers and could fuel inflation.

"I get the sense they think the administration's policies are leading to an environment that is weighted to the upside with inflation risks," Duy said. – Rappler.com

1. Will Miss Universe winners pay taxes to the Philippine government? How much will be the tax due? 

Yes. Miss Universe winners will pay taxes on their winnings. Prizes exceeding P10,000, cash or in kind, are subject to 20% final tax. 

2. Can President Rodrigo Duterte exempt Miss Universe winners from taxes? Is it true that President Ferdinand Marcos exempted Miss Universe winners and participants in 1974?

Yes. President Duterte can issue a presidential decree (PD) to exempt all Miss Universe winners from paying taxes. 

Yes. President Marcos issued PD 486 on June 19, 1974 exempting from tax the prizes of Miss Universe contestants and certain equipment and facilities used in connection with the Miss Universe pageant held here.

3. In an interview, Chavit Singson said he paid a $1-million non-refundable fee to the Miss Universe Organization and $6 million as payment for the rights to hold the pageant in the Philippines. He claims to earn around P120 million monthly or at least P1.44 billion a year to be able to afford the costs of hosting the pageant in the Philippines. Is he a top taxpayer? Will he be paying taxes as a result of organizing the pageant?

No, he's not considered a top taxpayer. But as he said in the interview, he has a lot of companies and some corporations are not under his name.

Yes, if he makes profit from organizing Miss Universe, it will be subject to regular corporate income tax, and sales of tickets and other products related to the pageant are subject to 12% VAT. – Rappler.com

Got a question about taxes? #AskTheTaxWhiz! Tweet @rapplerdotcom or email us at business@rappler.com.

Mon Abrea, popularly known as the Philippine Tax Whiz, is one of the 2016 Outstanding Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and founder of the Abrea Consulting Group and Center for Strategic Reforms of the Philippines (CSR Philippines). He currently serves as Adviser to the Commissioner of Internal Revenue of the Philippine government on tax administration reform in promoting inclusive growth. Follow Mon on Twitter (@askthetaxwhiz) or visit his Facebook page. You may also email him at consult@acg.ph.

MANILA, Philippines – The window is narrowing for Smart Communications to get a 25-year franchise extension, as it awaits anew the Senate's approval.

Sponsored by Senator Juan Miguel Zubiri, a bill was filed on January 19 this year, seeking to extend the franchise of the PLDT unit by another 25 years.

Under Republic Act (RA) No. 7294, Smart was granted its 25-year franchise in March 1992. The franchise is set to expire this March.

RA 7294 allowed Smart "to establish, install, maintain, lease, and operate integrated telecommunications/computer/electronic services and stations throughout the Philippines for public domestic and international telecommunications."

Last January 16, the House of Representatives approved House Bill 4637, extending Smart's franchise for another 25 years and adding some perks for telco franchises.

The previous 16th Congress had adjourned in June 2016 without approving Smart's franchise, after some senators raised issues like slow Internet service and dropped calls.

But with the refiling of the bill under the 17th Congress, some changes have been introduced to RA 7294, such as relaxing the public offering requirement and adding new equality and penalty clauses.

New perks, relaxed requirements

Before, telcos were required to make an initial public offering of at least 30% of their authorized capital stock within two years from implementation of the law.

But this requirement was changed under Senate Bill 1302 by excluding those which are "wholly owned by a public listed company."

In effect, Smart – which is a wholly-owned subsidiary of listed PLDT – will be exempted from the public offering requirement.

Under Senate Bill 1302, equality and penalty clauses were also introduced.

"If any franchise for telecommunications services awarded or granted by Congress of the Philippines or any amendment or revision to any franchise for telecommunications services, subsequent to the approval of this Act, provide terms, privileges, exemptions, exceptions and conditions that are more favorable and beneficial than those contained in or otherwise granted under this Act, then the same terms, privileges, exemptions, exceptions, or conditions, shall, ipso facto, accrue to the herein grantee and be deemed part of this act," the equality clause reads.

Under the penalty clause, should Smart fail to submit its annual report to Congress, it will be fined P500 per working day of non-compliance. The fine will be collected by the National Telecommunications Commission.

The Senate bill also seeks to exempt telcos with franchises from paying Customs duties, tariffs, and taxes on radio telecommunications and electronic communications equipment, machinery, and spare parts. (READ: PLDT's income drops by 33% on Rocket Internet losses)

Smart was granted authority to operate as a mobile cellular service provider in 1992 and has since been operating as a telecommunications provider for both domestic and international customers.

Smart runs cell sites, mobile broadband base stations, and fixed wireless broadband-enabled base stations, covering 1,634 cities and municipalities in the Philippines. – Rappler.com

MANILA, Philippines – With customer loans rising faster than deposits, Aboitiz-led Union Bank of the Philippines saw its net income register an all-time high of P10.1 billion in 2016.

Union Bank told the Philippine Stock Exchange (PSE) on Monday, January 30, that it saw its consolidated net income surge by 67% to P10.1 billion last year, compared to the P6 billion it posted in 2015.

The bank said its total loans jumped by 31% to P235.4 billion, resulting in total assets breaching the half-trillion mark, to close 2016 at P524.4 billion.

Union Bank's total deposits grew by 21% to P376.5 billion, with low-cost CASA increasing by 18%.

The combined growth in customer loans and deposits resulted in recurring revenues increasing by 21% to P19.2 billion.

"We are very pleased with our collective results. All of our major business segments contributed significantly to the bottomline," said Edwin Bautista, president and chief operating officer of Union Bank.

The bank's earnings performance translated to a return-on-equity of 16.9%. 

Union Bank said its interest income expanded by 22% to P14.8 billion, while fees went up by 19% to P4.4 billion in 2016.

Meanwhile, its full-year performance was also enhanced by tax-exempt profits from securities sold in the 2nd half of the year to support its loan growth strategy.

"More importantly, we were able to scale up our recurring revenue base, while making substantial headway in our journey towards digital transformation," Bautista said.– Rappler.com

MANILA, Philippines – The executive director of the Anti-Money Laundering Council (AMLC), Julia Bacay-Abad, has resigned from her post, following President Rodrigo Duterte's tirades against the agency's officials.

"The recent developments that confronted the AMLC and its Secretariat gave me the occasion to realize that, though already resilient on its own, the AMLC Secretariat will be accorded with renewed strength through a transformed strategy," Abad said in a statement on Monday, January 30.

Her resignation comes a month after Duterte threatened to "whack" executives of AMLC and the Bangko Sentral ng Pilipinas (BSP), accusing them of corruption and not doing their job.

"To be more effective, the direction that the AMLC Secretariat will prospectively take would have to come from a new leadership. This is not a decision that was taken lightly, but I believe that this is the right time for me to voluntarily relinquish my post as the executive director of the Anti-Money Laundering Council Secretariat effective January 31, 2017," Abad said in the statement.

The President first threatened AMLC and BSP officials in November last year. Duterte earlier accused them of contributing to a smear campaign against him during the 2016 polls.

It was then when Duterte challenged the BSP and AMLC to explain why they have not investigated accusations that he has P211 million in bank accounts which he did not declare in his Statement of Assets, Liabilities, and Net Worth.

The BSP and AMLC have denied these allegations, saying they did not leak the bank documents being cited by Senator Antonio Trillanes IV regarding the alleged undeclared wealth of Duterte. 

Being the Philippines' financial intelligence unit, AMLC has the power to penalize those who launder money, the act of attempting to conceal the illegal nature of proceeds from unlawful activities such as drug trafficking. (READ: #AnimatED: AMLC's bloodless contribution to war on drugs)

But under the country's bank secrecy laws, AMLC is prohibited from sharing any information with anyone else except under court order.

Shoes to fill

With Abad's resignation, her successor will inherit more work that needs to be done.

Her successor will have to continue seizing the entire $81-million funds stolen from the account of Bangladesh Bank, which was coursed through the Philippines.

Early in 2016, AMLC investigated the Bangladesh Bank heist, which led to the filing of civil forfeiture cases against the funds and properties involved in the cybercrime heist, as well as criminal complaints for money laundering against bank officers and employees. (READ: Limited power restricts AMLC actions in Bangladesh Bank heist)

A partial judgment in the civil forfeiture cases was obtained in favor of the government in July 2016, forfeiting the amounts of $4.63 million and P488.28 million, which were eventually turned over to the Bangladeshi government.

"The AMLC recognizes the fact that more work needs to be done... I reassure you that I will continue to serve this government in the best of my ability albeit in a different capacity. I remain committed to provide the necessary support to the new head who will lead the AMLC Secretariat, and steer it to greater heights," Abad said. – Rappler.com