MANILA, Philippines – To celebrate independence day, rides on LRT-1 will be free during peak hours on Monday, June 12.

Commuters will have free rides in all 20 stations of LRT-1 from Baclaran in Parañaque City to Roosevelt in Quezon City from 7-9 am, and from 5-7 pm, Light Rail Manila (LRMC), LRT-1 operators, announced before the long weekend.

First trips leave the Baclaran and Roosevelt stations at 4:30 am while the last northbound trip from Baclaran leaves at 10 pm and from Roosevelt at 10:15 pm.

Earlier this week, LRMC announced that it has completed the restoration 25 light rail vehicles (LRVs), thereby expanding the current fleet of LRT1 from 77 to 102, thus allowing for more rides.

Last month, the operator also broke ground on the LRT-1’s Cavite extension which is expected to be completed by 2020.

LRMC is a consortium of Ayala Corporation, Metro Pacific Investments Corporation (MPIC), and the Macquarie Group. – Rappler.com

MANILA, Philippines – The fallout continues for business tycoon Andrew Tan’s companies as Travellers International Hotel Group and Alliance Global Group suffered a combined loss of about P15.69 billion in market capitalization. This, a week since a deadly attack on Resorts World Manila (RWM) claimed the lives of 37 people on Friday, June 2.

According to data from the Philippine Stock Exchange (PSE) as of June 9, Travellers International Hotel Group, which operates Resorts World Manila, has lost about P7.09 billion in market capitalization since trading on June 1.

Meanwhile, its parent company, Alliance Global Group, has likewise suffered a loss of about P8.6 billion in market value. 

"Everything we're seeing in the share price movement, I would say you'd expect after the incident,” said Luis Limlingan, head of sales and research at Regina Capital Development Corporation. 

Prior to the attack, RWM stocks were priced at P3.40 apiece. But as markets closed on Friday, June 9, RWM stocks closed 10.29% lower at P3.05.

Casino stocks

Dealing a further blow to RWM are peer companies’ stock performance a week since the attack. 

Enrique Razon-led Bloomberry Resorts Corporation, which operates Solaire Resort and Casino, along with Melco Resorts and Entertainment Corporation, which operates City of Dreams Manila, are listed on the Philippine Stock Exchange (PSE).

Together, the two sites are part of RWM’s competition and make for 2 of Manila’s 4 main integrated casino-resort complexes.

While Bloomberry’s and Melco’s stocks plunged in the aftermath of the RWM attack, the two companies proved to be stiff competition for RWM once more, a week after the incident. (READ: Casino stocks plunge ater Resorts World Manila attack)

Before the attack, June 1 stock data reflected a price of P9.85 per share for Bloomberry, which fell to P9.30 on June 2. Melco’s share price also fell to P9.67 on June 2, down 4.26% from its June 1 share price of P10.10.

However, as markets closed on June 9, PSE figures show Bloomberry close at a price of P9.97, even higher than its June 1 share price. Likewise, Melco’s stock performance, while still recovering, has also steadied with a closing price of P9.35 as of June 9.

The same is yet to been seen with RWM stocks, which fell 7.94% to P3.13 as markets closed the same day of the incident on June 2.

RWM's stocks have barely been able to recover since.

Trading at an average price of P3.0 to P3.05 throughout the week, RWM traded for as low as P2.90 apiece – a stark difference from its initial public offering price of P11.28 per share.

Impact

The declining stock price of RWM has made even more evident the companies’ struggling performance over the last few years, as increasingly tough competition continues to enter the casino market. (READ: FAST FACTS: What you need to know about the Philippine Casino Industry)

Although a first mover in the integrated casino-resort landscape, RWM has slowly been losing its market share in gross gaming revenue (GGR).

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Data from financial services firm Credit Suisse showed a decline in RWM’s 50% market share in 2012 to 19% in 2017, according to the firm’s own projections.

“What is worth noting is that the mass tables and slot machines segments are actually the drivers of this decline,” said Credit Suisse in a 2015 report on the Philippine gaming sector.

The firm stated RWM’s market is most threatened by City of Dreams Manila, which continues to affect RWM’s market share in terms of GGR, because it is attracting a similar target market.

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Figures from the company’s financial disclosures also revealed the company’s declining financial performance in GGR.

The company attributed this to a decline in the volume of visits for both the non-VIP and VIP segments of its business, citing an overall drop of 10.4% in 2016.

Increased competition, highlighted by the recent opening of Okada Manila in Entertainment City, will likewise continue to further challenge RWM’s operations.

“The greater Manila market is showing signs of maturation with Resorts World Manila, the first privately owned resort, showing steep declines amid the ramp-up of the newer resorts, “ said Fitch Ratings, a credit rating agency, in its 2017 Global Gaming Handbook.

Company disclosures illustrated the continued decline in GGR, with the company earning P5,261 billion in the 1^st quarter of 2017, about 5.59% lower than its GGR of P5,573 billion in the same period last 2016. 

Uncertainty

Aside from a decline in its financial performance, tougher roads are up ahead for RWM. 

The Philippine Amusement and Gaming Corporation (Pagcor) has recently ordered RWM to cease and desist all gaming operations as Pagcor conducts investigations that hope to shed light on the company’s liability. (READ: Pagcor suspends Resorts World Manila gaming license)

Pagcor, in its stament, added the security lapses of RWM “put the Philippine gaming, tourism, and hospitality in bad light.”

The RWM attack, carried out by lone gunman Jessie Carlos, broke out past midnight of June 2 as he fired shots and set ablaze gaming tables in an attempt to steal P113-million worth of casino chips.

Carlos was a former employee of the Department of Finance who was heavily indebted. He was also part of Pagcor's National Database for Restricted Persons since March 2017 after his family filed for exclusion from casinos on his behalf. (READ: Gambling addiction: How the Philippines prevents, handles ‘problem gamers’) 

Since then, questions surrounding the recent RWM attack remain unanswered. While investigations continue, RWM’s fate remains in a state of limbo.– Rappler.com 

PARIS, France – Long an important source of revenue for telecom companies, roaming charges will be lifted in Europe starting June 15, raising pressure on operators in a tight market.

Roaming charges within and outside Europe account for an average of around 5% of sales for telephone operators in Europe, estimates Sylvain Chevallier of BearingPoint.

But the impact of the new measure will differ for corporate and individual clients, he adds.

On the Spanish market, subject to wide seasonal variations in business due to a reliance on tourism, Telefonica estimates the end of roaming charges in the EU will lead to a 1.2% drop in its sales this year.

But the change can hardly come as a shock for telecom operators, according to Victor Marcais of Roland Berger, who noted the plans have been in the works for several years and are "largely anticipated".

"If the operators are not ready, it will be more their fault than anything else," said Dexter Thillien, analyst with BMI Research. "It has been very gradual."

Still, telephone operators are taking different approaches as they gear up for the change. 

In Italy, for example, Wind-Tre says it implemented the European requirements two months early, while its rival TIM said it would adhere to the new rules the day they come into effect.

In France, Free expanded the reach of its roaming-charge-free zone in March, whereas Orange and Bouygues did away with the fees in May. A fourth company, SFR, is expected to follow suit on June 15. 

It will be hard to tell exactly how much the move affects telecom operators since they no longer detail the revenues in their filings.

The European Commission estimates the end of roaming fees will cost European telecom operators 1.2 billion euros ($1.3 billion).

The market generates 4.7 billion euros a year, according to European telecoms regulator BEREC. 

But the share of revenues from roaming charges already significantly declined in recent years as charges for calls and text messages dropped 90% since 2007 and data charges declined 96% since 2012 under EU regulations.

Data traffic, meanwhile, has grown 100-fold, according to the EU.

Bet on growth

But the telecoms business varies greatly from country to country, with Europe's southern countries relying heavily on tourism compared to their northern counterparts.

"Southern countries like Portugal or Greece have a lot of temporary clients and fewer with longer-term plans, so revenues from roaming fees also helped finance the costs of reinforcing networks to help deal with seasonal peaks," said Isabelle Jegouzo, who represents the European Commission in France.

The wholesale market – business among operators – was one of the main stumbling blocs in discussions as some operators were pushing for high prices while others sought to lower them.

"Unsurprisingly, the countries in the south wanted the highest prices whereas those in the north wanted the opposite. In the end, we got a typical European agreement, win-win, with no one completely winning but each one getting a bit," said Dexter Thillien at BMI Research.

The price per gigabyte was established at 7.70 euros, which is set to decline until 2022. Operators are allowed to apply surcharges – in accordance with local regulators – if losses linked to roaming surpass three percent of annual net profit.

"As consumers grow accustomed to using data throughout Europe they will undoubtedly be inclined to do so outside Europe, which will compensate for some of the losses," said BearingPoint's Chevallier.

The European Commission is making the same bet, said Jegouzo.

It aims to stimulate the digital economy in Europe in terms of numbers of users and services in the hope that consumption rises faster than the pace of dropping prices. 

"This is where operators will see gains," said Jegouzo.

"There are positive aspects that are being underestimated, particularly how the public sees the operators," said Roland Berger's Victor Marcais.

"It's a chance to improve their image but also to benefit from the rise in consumption."  – Rappler.com

MANILA, Philippines – Smart Communications Incorporated is set to provide free public Wi-Fi for the first 30 minutes along the country's busiest highway, EDSA.

Its parent company, PLDT Incorporated, said in a statement on Sunday, June 11, that this will benefit an estimated 500,000 daily commuters of the Metro Rail Transit Line 3 (MRT3), as well as passengers of the more than 326,000 vehicles that ply the major thoroughfare every day.

"With the Smart Wi-Fi rollout on EDSA, we are providing highest class data architecture connectivity for the thousands of commuters who pass through the MRT stations and ply the stretch of EDSA traffic every day, so they can boost their daily productivity," said Eric Alberto, PLDT executive vice-president and chief revenue officer.

The Wi-Fi service is free for the first 30 minutes for subscribers of any network, without a data cap. Users can extend their session by purchasing load cards, which cost P20 for two hours (valid for two days) and P50 for 10 hours (valid for 5 days). They can also top-up for P10 for 30 minutes (valid for a day).

The telecommunications giant said it collaborated with the Department of Information and Communications Technology (DICT) for this service.

Aside from the 13 platforms of the MRT3, Smart will also provide Wi-Fi services on the street level along EDSA and even between MRT3 stations.

With a backhaul capacity of up to one gigabit per second, the telco giant said it can support up to 3,000 connected users. (READ: DICT to make free Internet more accessible)

Smart added that its deployment of Wi-Fi along EDSA complements its continued LTE rollout, which aims to improve indoor coverage, as well as increase capacity of cell sites to handle more calls, texts, and mobile data traffic.

"Through these investments, we are preparing for the coming of 5G, the Gigabit Society, and the Internet of Things," said Manuel Pangilinan, chairman and chief executive officer of PLDT and Smart.

PLDT and Smart have committed to make LTE progressively available to 95% of the country's cities and municipalities by the end of 2018.

They have deployed carrier-grade Wi-Fi services at the Ninoy Aquino International Airport (NAIA), at the Light Rail Transit (LRT), and in key regional airports, seaports, as well as transport hubs all over the country.

Smart also offers Wi-Fi in high-traffic areas such as tourist spots, hospitals, schools, city halls, and malls, among others. – Rappler.com

MANILA, Philippines – Eton Properties of the Lucio Tan Group tapped Aboitiz Power Corporation to supply 5.2 megawatts (MW) to power the operations of its Cyberpod office buildings at Eton Centris in Quezon City.

Aboitiz Power subsidiary AP Renewables Incorporated (APRI) signed a power supply agreement with Eton Properties last month.

Under the agreement, Eton Properties will be sourcing 5.2 MW from the MakBan Geothermal Power Plant in Batangas, which is operated and managed by APRI.

"BPO operations need uninterruptible, round-the-clock power supply, especially here in the Philippines where majority of BPO companies cater to international customers with different time zones," said Eton Properties deputy chief operating officer Josefino Lucas in a statement.

"With Aboitiz Power as our power partner, we are confident that we will continue to deliver on our promise of quality and efficiency in our office developments," he added.

The real estate developer is creating more office spaces that are environment-friendly to optimize the continuous growth of the business process outsourcing (BPO) industry.

To date, Eton Properties has two BPO hubs – Centris Cyberpod at Eton Centris, where a 5th BPO-ready building is being built, and Corinthian Cyberpod along Ortigas Avenue.

Aboitiz Power and its partners have a net sellable capacity of more than 1,200 MW from its renewable energy portfolio of geothermal, hydro, and solar power plants located all over the country.

Aboitiz Power continues to grow its renewable portfolio with the construction of the 69-MW Manolo Fortich run-of-river hydro project in Bukidnon and the 8-MW Maris Canal hydro project in Isabela.

Soon, it will commission its first biomass power plant through subsidiary Aseagas in Batangas. – Rappler.com

MANILA, Philippines – Megawide Construction Corporation and its Bangalore-based partner GMR Infrastructure Limited submitted a P208-billion, 50-year unsolicited proposal for a more comprehensive expansion of the Mactan-Cebu International Airport, which includes building a 2nd parallel runway.

In a statement on Sunday, June 11, the listed construction firm disclosed that its airport group GMR-Megawide Consortium last Wednesday, June 7, submitted an unsolicited proposal that would make the Cebu airport the only Philippine airport with two independent parallel runways, seen to serve annual passenger capacities of up to 50 million through airside facilities and 3 passenger terminals.

"Passenger traffic has shown incredible growth in the last 2 or 3 years. While this is good news for the country, especially for Cebu, we want to ensure that the airport can ably cope with this continued progress," GMR-Megawide director Louie Ferrer said in the statement.

The consortium won the public-private partnership (PPP) concession deal to operate the Mactan-Cebu International Airport in December 2013.

However, the PPP contract does not include the improvement, operations, and maintenance of the runway and other related facilities, which remains with the Mactan-Cebu International Airport Authority (MCIAA).

Aside from a 2nd runway, the GMR-Megawide group intends to rehabilitate the airport's existing runway and taxiways, build a 3rd terminal, add a full-length parallel taxiway, as well as construct more rapid exit taxiways and runway holding positions.

Calls for more airport land

The consortium said the 50-year project calls for expansion of airport land in order to accommodate the new facilities. (READ: 4 PH airports in Asia's best airports list)

GMR-Megawide said it will be looking into options that will minimize the impact on surrounding communities, such as possible reclamation in Magellan Bay.

"We took into account the number of residents that may be affected by the airport expansion. We will be adopting an approach that prevents any adverse effect on their daily lives," Ferrer said. 

The runway capacity of the Mactan-Cebu International Airport has long been a concern among airport stakeholders.

"They really understand the requirements of the airport and the importance of planning ahead. The proposal for a 2nd runway is a fulfillment of their vision for Mactan-Cebu International Airport," Ferrer said.

Asked about the reception of government authorities to the unsolicited proposal, Ferrer expressed optimism.

"We submitted a highly detailed proposal tailored specifically to the needs of [the Mactan-Cebu International Airport] and we are looking forward to their response," he said.

"As a matter of fact, [the government] recently passed a resolution pushing for the implementation of a 2nd runway. Our proposal therefore dovetails perfectly with the directives of this administration," Ferrer added.

GMR-Megawide assumed operations of the Cebu airport in November 2014.

Since then, the Cebu airport has won several international awards like the Best Regional Airport in Southeast Asia from the CAPA Center for Aviation (2016) and Best Transport Deal from the Asset AAA Infrastructure Awards held in Hong Kong (2015).

Last year, Mactan-Cebu International was also named 14th Best Airport in Asia by the website The Guide to Sleeping in Airports.   

The consortium is currently undertaking the construction of Terminal 2, slated for completion in June 2018, which will increase the airport's overall passenger capacity to 12.5 million passengers per year from 4.5 million. – Rappler.com

MANILA, Philippines – The group of telecommunications and infrastructure tycoon Manuel V. Pangilinan is still keen on acquiring a stake in broadcast giant GMA Network Incorporated.

"We are open anytime, but the offer must be acceptable to us," Pangilinan told reporters on the sidelines of an event in Taguig City last Friday, June 9, when asked if his group is still open to an acquisition deal even if talks between the two camps have collapsed several times.

Last May, the 3 major shareholders of GMA had said they would entertain suitors "if the price is right."

GMA chairman and chief executive officer Felipe Gozon, along with the Duavit and Jimenez groups, collectively own roughly 80% of the broadcast firm.

Pangilinan's media interests are under MediaQuest Holdings Incorporated, which is a subsidiary of PLDT Incorporated's Beneficial Trust Fund.

The tycoon has stakes in the Philippine Star, Philippine Daily Inquirer, TV5, BusinessWorld (through Philippine Star), and Interaksyon. Aside from MediaQuest, Pangilinan also chairs PLDT and Metro Pacific Investments Corporation.

It was in 2001 when talks between GMA and Pangilinan on buying a minority stake in the broadcaster started. Negotiations bogged down in 2014 because of a pricing issue.

Pangilinan, however, clarified that as of June 9 this year, there has been "no discussion yet" between his and Gozon's groups.

Aside from Pangilinan, San Miguel Corporation president and chief operating officer Ramon Ang previously offered to buy a 34% stake in GMA for an undisclosed price.

But in 2015, GMA ended talks with Ang, which caught the latter by surprise. (READ: Why GMA-Ramon Ang talks collapsed)

Gozon said he also turned down offers from "old and new" suitors, including boxing champ Manny Pacquiao and former Ilocos Sur governor Luis "Chavit" Singson.

In the 1st quarter of 2017, PLDT saw its consolidated net income drop by a fifth to P4.97 billion from P6.233 billion a year ago.

Consolidated service revenues also decreased by 7% to P37.701 billion in the first 3 months of the year from the same period a year ago.

For GMA, its net income fell by 17% to P842 million in the first 3 months of 2017, from the P1.01 billion in the same period a year ago, due to the absence of election-related spending.– Rappler.com

DUBAI, United Arab Emirates – Qatar Airways has made Doha a global hub in just a few years, but barring it from Gulf states' airspace threatens its position as a major transcontinental carrier, experts say.

Along with its Gulf peers – Dubai's Emirates Airlines and Abu Dhabi's Etihad – Qatar's national carrier has captured a sizable portion of transit travel, capitalizing on the Gulf's central geographic location.

But political differences between Qatar and neighboring Saudi Arabia, the United Arab Emirates and Bahrain, as well as Egypt, exploded last week into a full-blown regional crisis, including severing air links.

The measures meant cancelling dozens of daily flights by Qatar Airways and carriers from those countries, and also mean Qatari aircraft have to make long diversions, mainly around Bahrain and the vast airspace of Saudi Arabia.

"The impact is already bad because it has driven up flight times and therefore costs. As the airspace tightens, the problem grows much worse," said aviation analyst Addison Schonland from the US-based AirInsight.

"Operationally, this is a constraint for the airline that is almost certainly now seeing its profits cut deeply," he added.

Qatar is almost completely encircled by Bahraini airspace that covers a large part of Gulf waters, and its planes usually cross Saudi airspace on their way to the rest of the Middle East, Africa and South America.

Instead, Qatari planes are now using Iran's airspace to get to Europe and skirting the southeastern tip of the Arabian Peninsula to avoid Saudi territory.

Flight times

The flight time for a Qatar Airways trip to Sao Paulo in Brazil, for example, has increased by around two hours, according to flight detecting websites.

Flights to North Africa are now traveling over Iran and Turkey towards the Mediterranean, instead of flying more directly over Saudi Arabia and Egypt.

However, flights to Europe appear largely unaffected as they continue to use the Iran route, with a just small diversion to avoid Bahraini airspace.

The Islamic republic has opened its airspace to around 100 more Qatari flights daily, increasing Iranian air traffic by 17%.

"For the future, Qatar flights' routes and fuel burn will be increased as a result of this," said aviation analyst Kyle Bailey.

Longer routes will bring passenger numbers down, argued Schonland.

"Future long-haul reservations will come down, because even with the high service and excellent amenities, who wants to sit for longer on an airplane?" he said.

About 90% of Qatar Airways traffic through Doha is transit, according to a report by CAPA Centre for Aviation.

Saudi Arabia and the UAE represent the two largest markets for Qatar Airways, said Bailey.

Losing these "will no doubt be devastating to the carrier's financial bottom line, wiping out about 30% of revenue," he said.

Qatar Airways is also the largest foreign carrier operating in the UAE, and the fifth overall after the country's own airlines, according to the CAPA report.

Ticket prices

Part of this transit traffic is likely to be scooped up by Qatar Airways' regional competitors Emirates and Etihad, experts say.

"No question about it. Especially Emirates because they have the A380 (superjumbo) capacity to catch the traffic without even a hiccup," said Schonland.

"There is no doubt that Emirates and Etihad would surely be reaping the benefits... In the long term, the increased passenger loads on the other carriers may push up demand causing ticket prices to go up on the other carriers," said Bailey.

The two UAE carriers have wide global networks, and together with Qatar Airways have drawn the ire of European and US legacy carriers who accused them of benefiting from state subsidies to expand into their traditional markets.

But Emirates and Etihad, as well as other carriers from countries involved such as the UAE's flydubai and Air Arabia, will also lose out with the suspension of their Doha routes.

"There can be few winners" from the ban, according to the CAPA analysis.

Contrary to the argument that Emirates and Etihad might boost their numbers of transit passengers, CAPA argued that the ban affects the reputation of Gulf aviation in general.

"The nuances of the ban are too particular for the public to understand, but the broader shadow it creates spreads widely," it said.

"Amidst growing security concerns and the existing laptop ban, passengers are unlikely to dig in to the reason for this ban. Gulf aviation becomes less attractive for all," it added.

The United States and Britain banned laptop and tablet computers on flights from certain Middle Eastern and Turkish airports in March for security reasons.

On a positive note, Qatar Airways announced late Sunday a 21.7 percent rise in its profits to $540 million in the financial year that ended in March.

The airline said it carried more than 32 million passengers, up from 26.65 million the previous year, representing the bulk of some 38 million passengers handled by Doha's airport. – Rappler.com

MANILA, Philippines – The Philippine economy in the 2nd quarter of 2017 is expected to expand faster than the 1st quarter's 6.4% growth, and could even hit close to 7%, thanks to robust growth in exports and agriculture, according to Socioeconomic Planning Secretary Ernesto Pernia.

"I think it will approach 7%. If you look at leading indicators, the 2nd quarter I think will be better [than the 1st quarter]," Pernia said.

"[The growth drivers include] exports, and also agriculture is improving," he added.

The Philippine economy's performance in the 1st quarter was weaker than expected, with the National Economic and Development Authority (NEDA) expecting a figure around 6.5% to 7.5%.

Despite a recovery in agriculture and robust growth in exports, the gross domestic product (GDP) grew slower to 6.4% in the first 3 months of 2017, a decline from the 6.6% growth during the 4th quarter of 2016 and 6.8% in the 1st quarter of 2016, the Philippine Statistics Authority (PSA) said last month.

Pernia said this can be explained by the base effects, as growth last year was high due to election spending.

The NEDA chief, however, expects the midpoint of the 6.5% to 7.5% to be achieved for the full-year growth. (READ: Solaire reports booking cancellations after Resorts World attack)

"The World Bank expects the Philippine economy to grow by 6.9% this year, while the International Monetary Fund forecasts 6.8%. So we should be able to achieve that this year," Pernia said.

He also noted that the Marawi siege and the Resorts World Manila attack will not have lasting impact on tourism and the economy as a whole.

"These are very short-lived, ephemeral, passing incidents. It's not something that's really going to have an impact. Those are temporary jitters, [and are expected to] dissipate." – Rappler.com

NEW YORK, USA – General Electric on Monday, June 12, announced the departure of CEO Jeff Immelt.

Immelt, who has served in the role since 2001, will hand his chief executive position over to John Flannery on August 1, the company said in a news release. Flannery will also succeed Immelt as chairman when he retires on December 31, GE said.

More details soon. – Rappler.com

MANILA, Philippines – Andrew Tan-led Empire East Land Holdings Incorporated said the recent attack on Resorts World Manila has no impact on its operations and expansion plans, as it is pushing through with its projects in Metro Manila and the south to ramp up reservation sales in the next 5 years.

"Well, there is really no privity between Resorts World and our company. That should be the answer. Resorts World Manila is owned and managed by a separately listed company and it is managed very well for many years now," Empire East president Anthony Charlemagne Yu told the company's stockholders in a meeting in Quezon City on Tuesday, June 13.

"We, in Empire East, condole with the families affected. Beyond that, it is more prudent for me not to comment on that issue," Yu said. 

Resorts World Manila is owned and operated by Tan's Travellers International Hotel Group. Travellers, which is the sister company of Empire East, has lost over P7.09 billion in market capitalization since trading on June 1, a day before the deadly attack on Resorts World Manila, which claimed the lives of 37 people.

Prior to the June 2 attack, Resorts World Manila stocks were priced at P3.40 each. But as markets closed on Friday, June 9, stocks closed 10.29% lower at P3.05.

Meanwhile, Empire East is not suffering a blow from Travellers. (READ: FAST FACTS: What you need to know about Resorts World Manila)

Empire East shares were unchanged at P0.69 each last Friday, as compared to June 1's closing. Empire East's market capitalization remains at P10.126 billion.

Yu said Empire East will continue to invest and expand in the Philippines, allocating P25 billion in capital spending budget over the next 5 years to fund its projects in Metro Manila and the south. 

Expansion plans

"We also plan to build more outside Metro Manila. We've been looking at different locations. [The main] problem is pricing, if we think there is absorbing capacity in that area. As of now, we don't have any properties in the Visayas and Mindanao. We are also looking within Luzon," Yu told reporters.

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<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">Anthony Yu says Empire East board has decided not to give dividends this year to use money for expansion plans. <a href="https://twitter.com/rapplerdotcom">@rapplerdotcom</a> <a href="https://t.co/wWvgem0FlD">pic.twitter.com/wWvgem0FlD</a></p>&mdash; Chrisee V. Dela Paz (@chriseedelapaz) <a href="https://twitter.com/chriseedelapaz/status/874435839069011968">June 13, 2017</a></blockquote>
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For this year, the company plans to launch 3 new residential towers: Little Baguio Terraces in San Juan City, Pioneer Woodlands in Mandaluyong City, and San Lorenzo Place in Makati City, which are nearly sold out.

Empire East's steady performance carried over into the 1st quarter of 2017, with sales growing to P1.179 million, up 23% from P958 million in the same quarter in 2016. Its net income after tax also increased by 18% to P165 million in the 1st quarter of 2017 from P140 million in the same period a year ago.

"For 2017 figures, we are confident we will be able to sustain the momentum we had last year. Reservation sales for instance in 2017 for the group is seen to go up," Yu said.

In 2016, Empire East projects and Manhattan City's reservation sales were at P14.7 billion. For Empire East alone, reservation sales were at P13 billion in 2016.

"We currently have P2.9 billion worth of properties in our land bank, with an aggregate of 404 hectares," Yu said.

He added that they are still finalizing the master plan for a mixed-use development in the 1.7-hectare Broadway Centrum property in Quezon City as well as a 23-hectare property in Pasig City envisioned for mixed-use development, to be named Empire East City. 

"The master plan is being revised. Whenever we meet, there are many recommendations, so these are the things we are looking at adding. Right now, [the project] cost is up in the air," Yu said.

For Empire East City, Yu said they expect to "freeze the concept and start pre-selling" this year.

The company is confident that Covent Garden and Mango Tree Residences, located in the Sta Mesa area and San Juan City, respectively, will continue to perform well.

"Pre-selling demand stays robust for the remaining residential condominium units of the two projects," Yu said.– Rappler.com

BRUSSELS, Belgium – The EU on Tuesday, June 13, is to unveil new rules that could require a huge slice of London's banking business to leave after Brexit in a blow to the city's supremacy as a global financial hub.

If confirmed, the rules would be seen as a hostile move against Britain ahead of coming Brexit negotiations only days after Prime Minister Theresa May embarrassingly lost her majority in British elections.

The draft law to be unveiled by European Commission vice-president Valdis Dombrovskis could deny post-Brexit London the right to host financial market "clearing houses" that deal in euros, the EU's single currency.

Clearing houses are a key part of the financial system's plumbing, with trillions of euros being handled every year, mostly out of London.

The issue of whether euro clearing houses can remain in the British capital is set to be one of the most contentious issues when Britain negotiates its future trade relationship with the EU after its departure.

Britain has jealously guarded dominance of the clearing house sector in Europe and won an EU court decision in 2015 against the European Central Bank in order to keep hosting the euro deals.

Amid the heated lobbying, the EU last month said it was exploring several options on the issue including the possibility that Britain maintain euro-clearing, while accepting strict Brussels oversight.

The London Stock Exchange has bitterly objected to relocation in a sign that any forced move out of the UK could be highly damaging to its business.

"It's going to be complete chaos. This has not been properly thought through," LSE chief executive Xavier Rolet told the Sunday Telegraph.

In a letter to Dombrovskis, the International Swaps and Derivatives Association said any move to an EU country would drive up costs for the financial sector.

A relocation could "heighten financial stability concerns", the powerful lobby added, with traders and banks struggling to find new homes for their operations.

Last week the Futures Industry Association, a US and UK-linked lobby, warned that forced relocation to the EU would require a near doubling of the $83 billion finance companies set aside in case of contract defaults.

This figure however has been dismissed by Frankfurt-based Eurex Clearing, owned by Deutsche Boerse.

London lobbyists also argue in the event of an EU ordered exile from Britain, only Wall Street or Asia would benefit.

Forcing a move out of London, "would ultimately be detrimental" and "is in no one's interest," Miles Celic, chief executive of the TheCityUK, said last month. – Rappler.com

ABU DHABI, United Arab Emirates (UPDATED) – The air embargo imposed on Qatar only applies to airlines from Qatar or registered there, the United Arab Emirates Civil Aviation Authority said Tuesday, June 13.

Saudi Arabia and Bahrain issued identical statements on the air embargo, which came into effect when Riyadh, Abu Dhabi and Manama broke off relations with Qatar on June 5, accusing it of supporting "terrorism".

The embargo bans "all Qatari aviation companies and aircraft registered in the state of Qatar" from landing or transiting through the airspace of the Emirates, Saudi Arabia and Bahrain, according to the statements published by the national agencies of the three countries.

The ban does not apply to aviation companies and aircraft not registered in Qatar and the 3 neighboring countries, and which wish to cross their airspace to and from Qatar, they said.

An exception is made for private planes and charter flights to or from Qatar, which require permission to transit through the airspace of the 3 countries, the statements said.

A permission request must be submitted 24 hours in advance and include a list of the names and nationalities of both crew and passengers, as well as the nature of cargo on board.

Qatar Airways Monday, June 12, called on the UN's aviation body, the International Civil Aviation Organization, to declare the Gulf boycott illegal and a violation of a 1944 convention on international air transport.

Qatar Airways CEO Akbar Al Baker said the move by Saudi Arabia and its allies was an "illegal blockade".

Saudi Arabia, the United Arab Emirates and Bahrain are among several countries which last week announced the suspension of all ties to Qatar over what they say is the state's support for extremist groups and its political proximity to Shiite Iran.

Qatar denies the allegations. – Rappler.com

MANILA, Philippines – San Miguel Corporation (SMC), the parent firm of the country's biggest oil refiner and retailer, is set to break ground on its single biggest investment in the Philippines so far: a new petrochemical facility worth $15 billion (P745.46 billion) to $20 billion (P993.95 billion) in the south of Manila.

SMC president and chief operating officer Ramon Ang said his company, along with two foreign partners, plans to break ground in the next 6 months.

"We have signed a non-disclosure agreement with them so we cannot say further. But what I can tell you is that it will be integrated – from crude oil to petrochemicals," Ang told reporters after SMC's annual stockholders' meeting in Pasig City on Tuesday, June 13.

Ang said the oil refinery will mainly produce petrochemicals, with a capacity of 250,000 barrels per day. According to him, the company will need "at least 1,000 hectares for the project."

"Petron Corporation's refinery is already in the northern part of Luzon, so you don't want to put all eggs in one basket," the SMC president added.

Ang also said the construction period for the greenfield project will take 2 to 3 years. They are looking at 30% equity and 70% loan for project financing.

Once done, Ang said his company will export the petrochemicals and by-products to the rest of the world. "World market potential for petrochemicals is very, very high, so we are gearing up for that."

"Petrochemical products are more stable and more profitable," he added.

Petron, SMC's subsidiary, has another oil refinery in Limay, Bataan, which it also plans to expand. Petron had earmarked a total of $500 million (P24.86 billion) to upgrade its refinery in Bataan.

The Petron Bataan Refinery is the country's largest integrated crude oil refinery and petrochemicals complex to date. Inaugurated in 1961 with a capacity of 25,000 barrels per day, it has grown to its current rated capacity of 180,000 barrels per day.

Other than the Bataan plant, SMC plans to spend at least $1.5 billion (P74.57 billion) to expand the capacity of its oil refinery in Malaysia to 150,000 barrels a day from 88,000 barrels a day.

Ang said the Malaysian market is promising, with a population of about 25 million consuming around 600,000 barrels a day.

Petron acquired in 2011 Esso Malaysia's Port Dickson refinery and fuel retail network in Malaysia. – Rappler.com

MANILA, Philippines – Travellers International Hotel Group Incorporated will exert all efforts to "preserve and defend its provisional gaming license," which had been suspended by the Philippine Amusement and Gaming Corporation (Pagcor).

Travellers, the owner and operator of Resorts World Manila, confirmed to the Philippine Stock Exchange (PSE) that it has received the order issued by Pagcor suspending its provisional license pending a probe into the company's alleged liability for the deadly June 2 attack.

"The company confirms that it is fully committed to abide by the said order and shall fully cooperate with the authorities on all investigations relevant to the incident," Travellers said.

"The company assures its stakeholders that all efforts shall be exerted to preserve and defend the company's provisional license," it added.

Last Friday, June 9, Pagcor suspended the provisional license granted to Travellers to operate casinos and other gaming facilities under the business name of Resorts World Manila after an attack that left 36 people dead.

Lone gunman Jessie Carlos barged into the hotel-casino and set gaming tables ablaze, triggering fires that suffocated guests and employees. Police said Carlos, a former Department of Finance employee who was heavily in debt due to gambling, then committed suicide.

With the suspension, Pagcor said Resorts World Manila must cease and desist all gaming operations while the investigation is ongoing. Failure to comply with the order would mean further sanctions for the casino.

Pagcor said the Resorts World Manila attack caused not only loss of lives and damage to property, but also placed the Philippine gaming, tourism, and hospitality industries in a bad light. (READ: FAST FACTS: What you need to know about the Philippine casino industry)

Following the disclosure, the share price of Travellers dropped 1.64% to P3 per share from the P3.05 close last Friday. (READ: Casino stocks plunge after Resorts World Manila attack)

Resorts World Manila is an 11.5-hectare development that opened in 2009. It was the first Pagcor licensee to operate an integrated resort and casino in the country.

Aside from Resorts World Manila, Travellers is also building another integrated resort and casino called Bayshore City Resorts World at Entertainment City in Parañaque City.

Bayshore City Resorts World is targeted to be completed by the end of 2020.– Rappler.com

HONG KONG – The pound wallowed near two-month lows Tuesday, June 13, unable to make a strong recovery from last week's shock election that saw Britain's ruling Conservatives lose their majority, throwing the country into uncertainty days before key Brexit talks.

While Prime Minister Theresa May looked to counter anger within her party by apologizing and telling MPs "I got us into this mess, and I'm going to get us out", there are doubts about her future in Downing Street.

May had called the vote in a bid to strengthen her majority, and her bargaining power, before going into the EU exit talks set to start on June 19. Now she must rely on the support of Northern Ireland's Democratic Unionist Party.

Greg McKenna, chief market strategist at AxiTrader, said: "The political uncertainty is unhelpful given Brexit talks are about to begin in the next week."

He added that "sterling came under renewed pressure as a result" of the newly formed government's refusal to soften its approach to the discussions. "Why the government wouldn’t use the election for a reset I just don’t know."

In Asian trade the pound bought $1.2690, up from New York trade but well off levels around $1.29 seen before the election.

The currency's "near-term direction will continue to be driven by the post-election fallout, but the prospects look increasingly gloomy as the possibility of another Tory leadership vacuum enters the picture at precisely the wrong time for the UK," said Stephen Innes, senior trader at OANDA.

Fed, Sessions in view

On equity markets, technology firms were unable to bounce back from the previous day's sell-off that was sparked by a rout in the sector on Wall Street Friday, June 9. 

Sony and Sharp were both down in Tokyo while Samsung was flat in Seoul after Monday's (June 12) tumble. However, Tencent and Lenovo were in positive territory in Hong Kong.

The Nasdaq suffered another slump Monday as Apple and Amazon took a beating, with analysts wondering whether the selling is down to profit-taking or the start of a broad retreat after all US indices hit records last week. 

Broader Asian markets fared slightly better after Monday's steep losses. Tokyo finished marginally lower but Shanghai closed up 0.4% and Hong Kong gained 0.6%.

Sydney gained 1.7% and Seoul jumped 0.7%, while Wellington and Taipei were also up.

Traders are now awaiting the end of the Federal Reserve's latest policy meeting. While another interest rate rise is widely expected, the bank's post-meeting statement will be scanned for some forward guidance and clues about future movements.

Also, US Attorney General Jeff Sessions is due to testify Tuesday to the Senate Intelligence Committee as it probes Russian meddling in last year's election and Moscow's links to under-fire President Donald Trump.

Attention has focused on Sessions as reports swirl that he may have had more meetings with Russian officials during the campaign last year than the two he has informed authorities of.

In early European trade London, Frankfurt and Paris each rose 0.3%. – Rappler.com

WASHINGTON DC, USA – The White House on Monday, June 12, issued a roadmap for loosening US banking regulations, including a recommendation to ease "stress tests" for large banks, according to a report published by the Treasury.

President Donald Trump requested the report in a February decree aimed at reducing the financial regulations imposed by the Dodd-Frank financial regulation law, adopted after a meltdown of the US mortgage market triggered the global financial crisis of 2008-2009.

"A sensible rebalancing of regulatory principles is warranted in light of the significant improvement in the strength of the financial system and the economy," the Treasury said.

The 150-page report will feed into Senate debates about gutting Dodd-Frank, which toughened bank regulations, prohibited federally insured banks from engaging in risky trading, and established the Consumer Financial Protection Bureau to oversee credit cards, mortgages and other financial products, among other measures.

While they do not call for scrapping the entire law, the new measures would implement a series of far-reaching changes, especially over the supervision of large banks.

The report calls for the size threshold at which banks are administered stress tests – which measure how they would weather possible economic shocks – to be increased from the current $50 billion in assets, even for foreign banks. The recommendations do not provide a level.

Some tests should be conducted every two years instead of annually, the report also says.

The Treasury also set its sights on the Bureau of Consumer Financial Protection, or CFPB, saying it requires a "significant restructuring."

The agency "was created to pursue an important mission, but its unaccountable structure and unduly broad regulatory powers have led to predictable regulatory abuses and excesses," it said, recommending the president be given the power to fire its director.

The new proposals also target the Volcker rule – which prohibits banks that make loans and collect consumer deposits from making risky deals with their own funds. The regulation should no longer apply to midsize banks with less than $10 billion in assets, the report says.

It would also require "living wills" – which lay out how a bank would wind itself down in case of failure without damaging the entire financial system – to be submitted every two years instead of annually.

Last week, the House of Representatives passed an even more far-reaching act to guy banking regulations by calling for the elimination of many of the provisions of the Dodd-Frank law.

It passed without the backing of Democrats, whose support will be required for any measure adopted by the Senate. – Rappler.com

MANILA, Philippines – Despite backlash on social media over alleged plagiarism, the Department of Tourism (DOT) said it stands by its new commercial, "Sights."

There are accusations that the DOT's latest ad, created by McCann Worldgroup Philippines, copied an ad of the South Africa Tourism Agency.

"We stand by McCann; we stand by the creative execution. We know for a fact that the Philippines is a choice destination and is also a choice place to stay for retirees. It's all part of the choice series of ads to show the spirit of the Filipino," said Frederick Alegre, DOT Assistant Secretary for the Office of Public Affairs, Communications, and Special Projects.

The commercial, released on Monday, June 12, drew criticism as social media users pointed out its similarities in narrative and style to South Africa's tourism campaign called "Reconsider South Africa." In both videos, a blind man explores beautiful destinations. For the DOT, it was a Japanese retiree who chose to live in the Philippines.

According to the DOT, its ad mainly targets retirees from all over the world. The commercial will be aired in countries with aging populations such as Japan and South Korea over the next 3 to 4 months.

'Due diligence'

McCann also reiterated that they conceptualized the commercial based on a true story. (READ: McCann responds to plagiarism accusations vs DOT ad)

"All our concepts were original. It was brainstormed and based on the truth that we found. There was no plan to pick up pieces from other ads. That's not the direction and that's not the way it works," Niña Terol, McCann assistant vice president for corporate affairs, told Rappler.

"Due diligence is part of our review and we can categorically say that there was no copying and no intention to copy. We've been an agency that has operated for over a century around the world and we're not going to compromise our integrity for any reason whatsoever," she also said.

Terol could not immediately confirm whether McCann was aware of the South African ad even before the controversy broke out.

But she said there was constant communication between the DOT and the ad agency throughout the creative process.

"At every stage there really has to be client approval. The team works together and there is client approval befoe anything is released," said Terol.

Alegre noted that while the two ads have similarities, they have unique propositions. In the case of the DOT ad, this was its targeted approach to retirees.

"I've been in the media and advertisement industry for a long time and there are really creative executions to similarly situated stories but have unique propositions. It can be about anything under the sun – [for example] the experience. But we can use it in a different angle and that's accepted. It's something that's accepted in the advertising industry," said Alegre.

Not the first time

This is not the first time the DOT has been criticized for lack of originality. The previous slogan, "It's more fun in the Philippines," was quickly compared to a vintage 1951 ad used by Switzerland.

Moving forward, Alegre told Rappler that the DOT will continue to respond to Filipinos giving feedback on the country's tourism campaign.

"I think it's important that we are able to react to them (netizens). We're happy to be able to engage because when it is discussed people will understand it better. In that sense, it's the essence of social media so it's fair game," Alegre said.

"We have a 24/7 social media team that does nothing but react to them (netizens) based on our campaign," he added.

Alegre also said the DOT is reviewing the processes in place to ensure originality in its promotional materials. – Rappler.com

MANILA, Philippines – PLDT Incorporated is eyeing gains from lower manpower costs and divestment of some assets, as it aims to boost what has been deemed as another transition year for the telecommunications giant.

"[This year] is a reset of the recurring core profitability of the firm. The guidance [for net income] was P21.5 billion. Now, that number could rise in relation to any asset sales that could happen during the course of the year," PLDT chairman, president, and chief executive officer Manuel V. Pangilinan said following the firm's annual stockholders' meeting on Tuesday, June 13.

PLDT has been trying in recent years to reduce its operating expenses – the main rationale behind its move to outsource its back-office IT to American multinational IBM.

"[The deal with IBM] is progressing reasonably well and we aim to sign the relevant agreement by the end of June," Pangilinan said.

"Not all of the IT people will move to IBM, some will be retained. We have to retain the so-called brains of the IT organization," he added.

The move, according to Pangilinan, is expected to give PLDT "substantial" savings of more than P7 billion "over a number of years."

The savings will not just come from manpower costs but also from IT processes and applications which are expected to become less expensive, as well as other costs associated with the dynamic field.

"It's not just people but the processes," Pangilinan explained. "There's also savings from travel expenses such as attending different forums and seminars, especially those abroad. That's been cut along with non-essential entertainment."

"We've also had a salary increase freeze for the past year or two so everybody is pitching in in terms of helping to cut expenses," he added.

The firm is also getting leaner in terms of industries, having already exited from business process outsourcing (BPO) by selling its remaining 20% indirect stake in SPi Global Holdings last month.

Pangilinan also previously announced plans to sell PLDT’s remaining 25% stake in Beacon Electric Asset Holdings (Beacon), which holds a 35% stake in the Manila Electric Company (Meralco), to a still unspecified buyer.

Pangilinan said the sale of PLDT's remaining stake in Beacon is expected sometime within the year. But he added: "It's really up to the buyer at this stage. It's beyond our hands."

Last year, PLDT sold 25% of its stake in Beacon to another Pangilinan-controlled firm, Metro Pacific Investments Corporation (MPIC), for P26.2 billion.

Cautiously optimistic

PLDT is still in the midst of its digital transformation, which Pangilinan said accounted for its "horrible" 2016.

The firm started 2017 on a mixed note, with wireless revenues down 18%, leading to a decline in service revenues by 7% in the 1st quarter of the year.

This led to a consolidated core income of P5.3 billion, excluding the gain from asset sales and adjustments in earnings before interest, tax, depreciation, and amortization (EBITDA), which is 26% less than a year ago.

However, the firm noted that its consolidated EBITDA of P16.5 billion for the 1st quarter of 2017, while 1% less than the same period a year ago, is 7% higher than the 4th quarter of 2016. It also marked 3 straight quarters of improvement in EBITDA.

Pangilinan said he is expecting recovery starting in the 2nd quarter of 2017, but added that PLDT still faces a long road to improving its profitability.

"While we can probably take heart from these results, no one is popping open champagne bottles. One quarter does not a year make. Your management know very well that the road to recovery is long, and the climb will be steep," he told stockholders at the meeting. – Rappler.com

MANILA, Philippines – In an effort to reduce debt, PLDT Incorporated is selling its remaining 25% equity interest in Beacon Electric Asset Holdings Incorporated (Beacon) to its sister company Metro Pacific Investments Corporation (MPIC). This transaction is worth P21.8 billion.

Beacon holds a 35% interest in Manila Electric Company (Meralco) and a 56% interest in Global Business Power Corporation (GBP).

The money will help PLDT pay off its debt, mainly arising from the acquisition of a 59% equity interest in San Miguel Corporation's telecommunications business.

For MPIC's part, the additional stake will help the conglomerate increase equity interest in GBP, which is GT Capital Holdings Incorporated's power generation arm.

"The divestment of our Beacon investment will help the PLDT group focus on the key priorities in its core businesses. While the investment is now viewed as no longer strategic, it has nonetheless been a very financially satisfying one," PLDT chairman Manuel V. Pangilinan said in a statement on Wednesday, June 14.

"Proceeds from the sale will be used principally to reduce debt and to fund the ongoing network upgrade and expansion," he added.

Beacon is a special purpose company jointly owned by PLDT Communications and Energy Ventures Incorporated and MPIC.

MPIC will pay P12 billion in cash on closing, which is anticipated to occur within this month. The balance of P9.8 billion will be paid in the next 4 years, PLDT said.

Upon completion of payment, PLDT will no longer have any direct interest in Beacon or any indirect interest in Meralco and GBP.

No more minority partner

To fund the investment, MPIC said it completed an overnight placing of 4.5% of its directly held Meralco shares for P12.67 billion.

Upon acquiring 100% interest in Beacon, MPIC will increase its ownership interest in Meralco to 45.5% from 41.2% and in GBP to 56% directly and 6.4% indirectly.

"The acquisition of [PLDT's] remaining 25% in Beacon, at what I consider to be a very attractive entry price, means that for the first time we have no minority partner in our power portfolio holding company," MPIC chief executive officer Jose Maria Lim said.

"We are now free to accelerate our rate of participation in the Philippine power sector, building on our nationwide presence as we embrace distribution, thermal generation, renewables, and energy from waste. The transactions announced today are also immediately accretive to earnings," Lim added.

MPIC is the Philippines' largest infrastructure investment management and holding company. Meralco is the biggest electricity distributor in the Philippines. 

Pangilinan chairs PLDT, MPIC, and Meralco. PLDT and MPIC are 2 of the 3 Philippine subsidiaries of First Pacific Company Limited.

Last June 3, MPIC and GBP announced that the latter had entered into an agreement with Alsons Consolidated Resources Incorporated to acquire 50% of its coal generation portfolio holding company in Mindanao, subject to fulfillment of certain conditions. – Rappler.com