BORACAY, Philippines – Visitor arrivals from South Korea and China are the top source markets of Boracay Island for the first 6 of months of 2017, thanks largely to regional and domestic flights mounted to Kalibo and Caticlan airports.

South Korea topped the tourist-generating markets with 175,470 arrivals, followed closely by China with 174,064. Taiwan is the third biggest source of tourists with 25,067.

Between January to June, Boracay Island received 76% of its 495,436 foreigners from the top 3 inbound markets for tourist arrivals, according to the Malay Municipal Tourism Office and Department of Tourism - Boracay office.

For the month of June, the East Asian region was the largest contributor of tourists, with 53,513 or 83% of 64,651 arrivals.

Another 3,491 tourists from Southeast Asian countries (Vietnam, Thailand, Cambodia, Laos, Singapore, Brunei, Malaysia, Myanmar, and Indonesia) and 2,092 tourists from North America (Mexico, United States, and Canada) arrived in Boracay last June.

There were also 1,525 tourist arrivals from Northern Europe, and 960 tourist arrivals from Middle East countries.

Meanwhile, the number of domestic tourists to the island went up by 21%, from 484,131 in 2016 to 584,753 in 2017.

There was also an upward trend in total tourist arrivals – 1,107,167 in 2017 or a 13% increase from 982,710 in 2016. – Rappler.com

MANILA, Philippines – Seeing a slower buildup of government spending, First Metro Investment Corporation and the University of Asia and the Pacific (UA&P) have lowered their Philippine economic growth forecast to 6.5% to 7% this year, from an earlier projection of 7% to 7.5%.

"The 7% growth in the 2nd half of 2017 may not be enough to offset the slowdown in the 1st half. What they should do is not to change the course of the public-private partnership (PPP) projects that have already been rolled out, because changing balls midway will cause delay," UA&P economist Victor Abola said on the sidelines of a media briefing in Makati City on Wednesday, July 5.

Among these delayed infrastructure deals are the South Line of the North-South Railway Project and the 5 regional airports, which shifted the funding from the PPP mode to official development assistance or the national budget.

Abola's sentiments were echoed by First Metro president Rabboni Francis Arjonillo, who said, "We expect the Philippine economy to grow at a slower pace if government spending does not accelerate before the end of the year."

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. This is mainly due to slow implementation of big-ticket infrastructure projects and high base effects due to election-related spending.

"We are quite concerned about infrastructure spending. It is not just about money. The real problem here is technical competence. Normally, lack of competence comes from the government sector, while technical expertise is easily available among the private groups," First Metro chairman Francisco Sebastian said. (READ: For Dutertenomics to work, the President has to take charge)

"It is really worrisome. What I would love to hear from the President is that he will pursue all the previous admin's projects and then he will add more," Sebastian told reporters.

Strong fundamentals

Despite the slow infrastructure spending, First Metro said the country's economy will remain strong, underpinned by the double-digit rise in capital goods imports, steady increase in foreign direct investments, and resurgence of manufacturing. Other growth boosters include the steady expansion of remittances from overseas Filipino workers (OFWs), the business process outsourcing (BPO) sector, and tourism.

Arjonillo added that the implementation of the Comprehensive Tax Reform Program (CTRP) seen early next year "would also give our economy a push."

First Metro maintains its inflation forecast of 2.8% to 3.2% for 2017 as food prices are seen to remain stable and oil prices are expected to remain low due to increased crude oil production and higher US shale oil output.

The investment arm of the Metrobank group also expects OFW remittances to sustain its 2% to 4% growth in 2017, supported by the improvement in the global economy.

'Not political'

Meanwhile, First Metro's and UA&P's projection for exports is pegged at 10% to 14% this year, buoyed by the strong growth of the Philippines' biggest trading partners, the United States and China.

Exports to the European Union and the Association of Southeast Asian Nations (ASEAN) have also expanded, given their improved economic performance and outlook.

As for imports, these will "likely grow by 8% to 12% – lower than the beginning of the year forecast of 10% to 14% due to lower oil prices," according to First Metro and UA&P.

First Metro also maintains its peso-dollar forecast at an average of P51 against the greenback. "The Philippine peso will remain under pressure as the US economy continues to gain traction, leading to the strengthening of the US dollar," Abola said.

According to the economists, financial markets are unfazed by the unrest in Marawi City in Lanao del Sur, the imposition of martial law in Mindanao, and the deadly attack on Resorts World Manila.

"People realize these are isolated. Overall growth story of Philippine economy remains intact. So far, as it is now, we are not so concerned. But of course, it won't be concluded soon," First Metro executive vice president Justino Ocampo said.

Sebastian echoed this, saying: "The political unrest hasn't spread beyond Marawi. It is important that it doesn't become contagious... The fundamentals of the Philippine economy remain not to be political like the OFW remittances and others. They will reassert themselves."

For Abola, the Supreme Court's decision to uphold President Rodrigo Duterte's declaration of martial law in Mindanao is positive for the business community.

"Martial law is a local issue. If you ask businessmen, this even gives the government the chance and the legroom to resolve the conflict there. Even Marawi is not mainstream in Mindanao. Also this is the President's kingdom, he will not allow its economy to be affected," Abola said. – Rappler.com

MANILA, Philippines – Udenna Corporation, the holding company of businessman Dennis Uy, fully acquired Enderun Colleges Incorporated for an undisclosed price – a move seen to support its aggressive expansion in various industries.

Udenna said in a statement on Wednesday, July 5, that it closed the transaction to purchase Enderun, a private education institution in the Philippines founded in 2005 by Jack Tuason, Javier Infante, and John Suits.

Among Enderun's financiers were businessman Simon Bakker and A. Soriano Corporation, according to the school's official website. Mang Inasal founder and DoubleDragon Properties co-founder Edgar "Injap" Sia II is also part of the school's advisory board.

"Our acquisition of Enderun Colleges comes at an opportune time," Uy said. "It supports our aggressive expansion in industries vital to the Philippine economy's further growth."

Prior to acquiring Enderun Colleges, Udenna invested in a maritime training school to support its shipping and logistics businesses. Its recent investments in the hospitality sector make Enderun an integral part of its growth strategy.

Udenna has diverse business interests in oil and gas through Phoenix Petroleum Philippines Incorporated; shipping and logistics through Chelsea Logistics Holdings Corporation; and real estate through Udenna Development Corporation, among others.

Uy also plans to build a $300-million integrated resort and casino on the Punto Engaño peninsula on Mactan Island, Lapu-Lapu City.

Udenna in May signed a provisional license agreement with the Philippine Amusement and Gaming Corporation (Pagcor) for what could become the country's first integrated resort and casino outside Metro Manila.

"In 10 years, Enderun Colleges has established itself as a premier management school, anchored on holistic leadership development, global orientation and career-focused academic programs while providing its students a vibrant college life," Enderun president Edgardo Rodriguez said.

"Enderun Colleges has built an impeccable reputation and has surpassed all its quality goals, but the time has come to explore new growth opportunities, which the new ownership may be able to accelerate," Rodriguez added.

Udenna said it will retain the corporate management and school administration of Enderun Colleges. The Uy-led conglomerate also said it will work closely with the college's founders to ensure a smooth and efficient transfer of ownership.

"We are committed to the mission of Enderun Colleges to equip students with the academic training, professional competencies, and character necessary for success in the global workplace," Uy said.

With its main campus located on a 1.8-hectare property in Fort Bonifacio, the Enderun campus now houses 6 buildings and can accommodate an additional 8,200 square meters of classroom space.

The school's academic programs initially focused on hospitality management and culinary arts. In 2009, it expanded its course offerings to include business administration, entrepreneurship, and economics.

Aside from offering degree and certificate programs, Enderun Colleges operates food and beverage outlets within and outside its campus. It also provides management services and marketing solutions to the hospitality sector.

Evercore, a premier independent investment banking advisory firm, acted as sole financial adviser to Enderun Colleges for the transaction.

Uy was among the major campaign contributors of President Rodrigo Duterte. Since the start of the Duterte administration, Uy's holding company has been expanding aggressively in various industries – from logistics to education. (READ: Who's who in Duterte's poll contributors list) – Rappler.com

MANILA, Philippines – The increase in consumer prices in June 2017 was the slowest in 5 months as the cost of domestic gasoline fell significantly – a trend seen to continue for the rest of the year.

With stable and low oil prices, slower price adjustments in both food and non-food commodities were recorded last month by the Philippine Statistics Authority (PSA).

This caused the Philippine inflation rate to slow down to 2.8% in June, from the 3.1% recorded in May.

The National Economic and Development Authority (NEDA) projects the moderate inflation rate registered in the first 6 months of 2017 to continue for the rest of the year.

First Metro Investments Corporation, the investment banking arm of Metrobank Group, expects the inflation rate to be between 2.8% and 3.2% by year-end.

"Food prices will continue to be stable and oil prices will remain low due to increased crude oil production and higher US shale oil output," First Metro senior vice president Christopher Salazar said in a media briefing on Wednesday, July 5.

The June inflation rate is lower than market expectations of 3%, and within the government's target of 2% to 4%.

Without the volatile prices for food and energy, the core index for consumer prices also eased to 2.6% in June from 2.9% in May. This reflects the general price stability across goods and services.

For food and non-alcoholic beverages, inflation slowed to 3.5% in June from 3.8% in May.

Likewise, non-food inflation slowed to 2% in June from 2.5% in May.

"This follows the significantly slower year-on-year increase in domestic petrol prices during the period, particularly unleaded gasoline (5.1% from 9.9%), diesel (5.3% from 13.6%), and kerosene (3% from 9.6%)," NEDA Undersecretary for Policy and Planning Rosemarie Edillon said in a statement.

Good weather conditions

Edillon added that keeping inflation stable strengthens prospects of stronger domestic economic activity in the near-term.

"The significant decline in the probability of extreme weather disturbances due to El Niño and La Niña until the end of 2017 bodes well for agricultural production and commodity prices moving forward," the NEDA official said.

She added that the government should make the most of good weather conditions to accelerate the implementation of climate change adaptation measures.

"Among the crucial ones are investing in infrastructure like catchment basins, advance atmospheric moisture extraction, and promoting water-saving technology. Rehabilitation of damaged irrigation systems and periodic maintenance will also ensure disaster and climate resiliency of the agriculture sector," Edillon said.

But despite stable inflation levels, possible risks still have to be considered.

"On the external front, domestic prices may be affected as global financial market conditions adjust in response to the faster monetary policy normalization in the United States," Edillon said.

She added that, domestically, the transitory impact of the proposed Comprehensive Tax Reform Program (CTRP) could push up inflation once implemented.

"We find it critical to have social safety nets to mitigate the short-run effects of the tax reform program. Nevertheless, the government needs to communicate well to the public the CTRP's benefits especially in terms of productivity improvements which, in effect, will eventually result in lower inflation," she said.

In January this year, the inflation rate clocked in at 2.7%. – Rappler.com

MANILA, Philippines – It is the nation's largest entertainment and media group and among the assets most associated with the enduring Lopez family. So what exactly lies inside ABS-CBN's famous rings?

Family behind the business

ABS-CBN is the brainchild of the Lopez brothers from the sugar-producing province of Iloilo.

The industrialist Eugenio "Eñing" Lopez Sr and his politician brother, former vice president Fernando Lopez, founded Chronicle Broadcasting Network (CBN) in 1956 primarily for radio broadcasting. They acquired and merged CBN with Alto Broadcasting System (ABS) in 1967. 

It was among the companies seized from the Lopezes during the Martial Law years, around the time Eñing's son, Eugenio Jr or "Geny," was imprisoned then went on self-exile. Geny set up the foundation for much of ABS-CBN's revival and rapid growth following the fall of the late dictator Ferdinand Marcos.

The Lopezes control the publicly listed media behemoth through a 56.6% stake via Lopez Holdings Corporation, which in turn is owned 52% by privately held Lopez Incorporated.

Eugenio "Gabby" Lopez III, the son of Geny Lopez, turned over the reins of ABS-CBN to his cousin, 46-year-old Carlo Katigbak, who is now president and chief executive officer. Gabby remains chairman.

How it earns

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Size, scale, other attributes

The media conglomerate has its hand in everything from movies, TV shows, and music to pay TV, and more recently, theme parks and wireless communications.

It is the largest free-to-air TV broadcast station in the country with a total national day audience of 49.5% for 2016, according to media measurement firm Kantar Media. It also operates 19 radio stations, including its flagship stations dzMM on AM and 101.9 on FM.

Aside from its flagship station channel 2 on free-to-air TV in Metro Manila, the company has a regional network of 25 originating stations, 8 affiliates, and a collection of strategically-located relay stations across the county.

BRANDS

The firm's other subsidiary channels include:

• ABS-CBN News Channel (ANC)
• Cinema One
• Myx
• ABS-CBN S+A (Sports and Action)

ABS-CBN also produces TV shows, movies, and music through its entertainment arm Star Cinema. 

It owns SkyCable, the largest pay TV provider in the country which also offers broadband internet services. It acquired Destiny Cable, once its closest competitor, in 2012.

It was the first Filipino company to pursue global programming through The Filipino Channel (TFC), which broadcasts to viewers in the United States, Canada, Europe, Australia, the Middle East, and Asia Pacific. It's into international film distribution, remittances, retail, sponsorships, and events.

ABS-CBN operates the local franchise for the Kidzania theme park in the Philippines and has a joint venture with Globe Telecom to distribute its entertainment content through mobile.

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Since advertising is the firm's main source of revenue, election years are a boon to the media conglomerate as these consistently mean political ads, bringing more advertising revenue.

In the last 3 election years – 2010, 2013, and 2016 – the firm's net income went up by 87%, 25%, and 39% respectively.

Challenges

Competition in the capital-intensive business was heightened in 2008 when another media network, TV5, emerged in 2008. The third-liner, which is part of the business group led by businessman Manuel Pangilinan, challenged the two incumbents, ABS-CBN and GMA-7.

Like all media firms, ABS-CBN has to negotiate the rapidly changing space as more and more consumers migrate to the internet and social media for media content and entertainment.

Being a media content firm, it is also particularly vulnerable to digital piracy, including the illegal downloading of its movies and shows.

Streaming services such as Netflix, Hooq, and iflix could eat into its viewership pie. – with research from Sofia Tomacruz / Rappler.com

MANILA, Philippines –  The Philippines' biggest fast-food chain has lost a long trademark battle against the nation's "King of Night Entertainment" to own the "jolli" brand, according to government documents.

Famous for fried chicken, hamburgers and spaghetti, Jollibee Foods opposed in 2013 the trademark registration of real estate firm Jolliville Holdings Corporation, saying it was "confusingly similar" with its name. 

But the Intellectual Property Office of the Philippines ruled in favor of Jolliville, which said the company's name was a tribute to its founder Jolly Ting. 

"While (Jollibee) was making it big in the food service business so was Mr. Jolly L. Ting in the night entertainment business," the Philippines' patent office said in the decision released this week.

"As the owner of a string of night entertainment establishments such as Pegasus, Discovery, Mega Heartbeat, Lexus, he earned the moniker 'King of Night Entertainment.'" 

The government agency said there was no reason to prohibit the registration of Jolliville, which later diversified its business into property management and development. 

Jollibee had accused Jolliville of unfair competition but the government said there was no evidence the property firm passed off its goods and services to be part of those of the fastfood giant. 

"Jollibee and the 'bee' mascot device... is great for kids' entertainment," the ruling said.

The market cheered the ruling on Wednesday, with Jolliville share prices surging 12.01 percent to close at 6.90 pesos (13.6 US cents).

Jollibee shares ended unchanged at 208 pesos. – Rappler.com

MANILA, Philippines – Global insurance giant AXA is expanding its health product lines as well as its digital and IT presence in the country ahead of what it sees as great time for a rapidly changing local insurance environment.

"We are focused on Asia, and the Philippines is a particularly interesting market for us. The average age of the population is 23 years old, something we dream of in Europe," said AXA Group Global CEO Thomas Buberl at a briefing in Makati City on Wednesday, July 5.

"The population is coming into the working age, offering huge potential, and there's a huge infrastructure for health [insurance] that still needs to be built. We can import a lot of knowledge from elsewhere to really bring into the Philippines and go beyond insurance," he added.

AXA is also set to move its regional IT shared services center to the Philippines, with the facility expected to open in the 2nd half of 2017.

"We chose Manila due to its well-established IT talent pool and similar time zone to AXA Asia and regional countries and customers. The center will focus on both digital and core IT technologies and it is planned that the new center will grow to a few hundred AXA IT employees by 2020," Buberl said.

He also noted that the Philippine market continues to show promise, growing overall by 25.77% in the 1st quarter of 2017.

Expanding insurance offerings

AXA Philippines, a joint venture between AXA Global and GT Capital-led Metrobank, booked P21.6 billion in total premium income last year, making it the 2nd largest life insurance firm in the country behind Sun Life, according to the Insurance Commission.

In the 1st quarter of 2017, AXA Philippines' total premium income grew at 30%. AXA Philippines chief executive officer Rahul Hora expects that 30% growth to be sustained this year, especially as the firm is in the midst of expanding its product portfolio after having acquired general insurance firm Charter Ping An last year.

The acquisition allows AXA Philippines to diversify into all types of insurance. In particular, it is aggressively pushing its health insurance.

"In the local industry, the participation of the private sector in health is only at 5% so there is such a big drive on the health side to give customers what they need," Hora explained.

"Out-of-pocket expenses that customers pay [for medical care] is one of the largest in Asia. A full 54% of the health expenditures in the country is being paid by individuals, so it shows how little the contribution of insurance companies is here. That is what drove us to launch new health products and that is our focus," he added.

The country's young demographics also gives the firm an opportunity to use digital services to reach new customers. Hora noted that 15% of AXA Philippines' customers are using their app.

A lot of the firm's growth also comes due to its partnership with Metrobank.

"Our partnership with Metrobank, which we are extending to PSBank, allows us to position ourselves as a one-stop shop for customers. [A customer] can walk in and get the full suite of financial products," Hora explained, adding that about 60% of the AXA business comes from Metrobank.

Looking out for opportunities

The planned expansion comes at a time of consolidation for the local industry as new regulations will require insurance companies to have a capitalization of at least P1.3 billion by 2020.

At least 5 non-life insurance firms have already said they may close down, which could provide acquisition opportunities for bigger firms like AXA Philippines.

"We are always on the lookout [for acquisitions] because of the growth objectives that we have for the market. Whenever we feel that there is an opportunity that makes economic sense for the shareholders to buy, we definitely will be looking at those options," Hora said.

He added that "nothing is shortlisted or close to a deal as of now but we are always on the lookout because our focus here is going to be in general insurance and in health insurance so any opportunities ... will always be looked at by AXA." – Rappler.com

DUBAI, United Arab Emirates – Emirates and Turkish Airlines announced on Wednesday, July 5, that they had won exemption from a US ban on passengers taking laptops and tablet computers on flights from their Dubai and Istanbul hubs.

They are the latest carriers after Abu Dhabi's Etihad to win a reprieve after Washington imposed new rules in March on direct flights from 10 airports in Turkey, the Middle East and North Africa.

"The ban on electronic devices has been lifted with immediate effect for flights to destinations in the United States," an Emirates spokesman told Agence France-Presse.

He said the airline had won the exemption after implementing new security measures demanded by Washington when intelligence officials learnt of efforts by the Islamic State group to produce a bomb that could be hidden inside electronic devices.

They required the installation of sophisticated imaging technology for X-ray and ultrasound screening of carry-on devices.

All other electronic devices larger than a mobile phone had to be transported only in checked luggage.

The laptop ban triggered a fall in demand for Emirates' US-bound flights and in May the airline reduced services on five of the 12 US airports it serves.

Istanbul's Ataturk International Airport, the only airport in Turkey with direct flights to the United States, introduced the same new screening procedures to earn the country's flag carrier an exemption.

"Dear Passengers, #WelcomeOnBoard to our US-bound flight. Please fasten your seatbelts and enjoy your own electronic devices," Turkish Airlines said on Twitter late on Tuesday.

Its first flight to benefit from the new exemption was its 6.45 am (0345 GMT) service to New York's John F Kennedy International Airport on Wednesday, the Dogan news agency reported.

Etihad was the first airline to meet the new US security requirements, with its exemption starting on Sunday. 

It earned praise from the US Department of Homeland Security for its swift action.

Britain announced a similar ban on personal electronic devices for flights originating from six countries, including Turkey but not the United Arab Emirates.

Turkish Airlines chief executive Bilal Eksi said on Wednesday that he expected Britain to lift its ban on the airline's flights "shortly". – Rappler.com

MANILA, Philippines – Allianz PNB Life Insurance teamed up with a unit of HSBC Philippines in a tie-up that brings together two of the largest financial services in the world.

Allianz PNB's agreement with HSBC Insurance Brokers Incorporated, announced on Wednesday, July 5, will allow Allianz to offer insurance products and services to HSBC customers and is part of Allianz's move to delve deeper into the Philippine market.

The move began in earnest when the Germany-based global insurance giant acquired 51% of the life insurance business of Philippine National Bank (PNB) in the tail-end of 2015.

"As we pursue our mission of securing financial wellbeing for more Filipino households, finding the right partners to help us develop tailor-fit solutions and provide outstanding customer service is critical," said Allianz PNB president and chief executive officer Olaf Kliesow in a statement.

For his part, HSBC Philippines president and CEO Wick Veloso highlighted that the distribution arrangement would enable more middle-class participation in financial investments.

"As one of the fastest-growing economies in ASEAN, the Philippines will have to add financial protection, investment, and risk management to a foundation strengthened by young demographics and rising education standards," he said.

The first product that Allianz PNB and HSBC Insurance Brokers will be offering under the brokerage's general sales program is called Wealth Power, a single-pay, investment-linked life insurance plan available in both Philippine peso and US dollar.

The investments will be made in Asian bond markets, high-quality fixed income securities, or in both fixed income securities and a concentrated portfolio of stocks listed on the Philippine Stock Exchange (PSE), depending on the investor's investment outlook.

The plan will come with protection coverage of 130% of a customer's single premium and also gives customers access to dollar-denominated funds managed by Allianz Global Investors, a diversified active investment manager with more than 501 billion euros in assets. – Rappler.com

DOHA, Qatar – Qatar Airways announced on Thursday, July 6, that it had won exemption from a US ban on passengers taking laptops and tablet computers on flights from its Doha hub.

It is the latest carrier after Abu Dhabi's Etihad, Dubai's Emirates and Turkish Airlines to meet new rules imposed by Washington in March for direct flights from 10 airports in Turkey, the Middle East and North Africa.

"Qatar Airways is pleased to confirm that with immediate effect, all personal electronic devices can be carried on board all departures from Hamad International Airport to the United States," the airline said.

"Qatar Airways and Hamad International Airport have met with all requirements of the US Department of Homeland Security's new security guidelines."

Washington drew up the new guidelines after intelligence officials learnt of efforts by the Islamic State (ISIS) group to produce a bomb that could be hidden inside electronic devices.

They required the installation of sophisticated imaging technology for X-ray and ultrasound screening of carry-on devices.

All other electronic devices larger than a mobile phone had to be transported only in checked luggage.

Etihad was the first airline to meet the new requirements, with its exemption starting on Sunday, July 2. It was followed by Turkish Airlines and Emirates on Wednesday, July 5. – Rappler.com

MANILA, Philippines – San Miguel Corporation (SMC), a diversified conglomerate led by businessman Ramon Ang, is in discussions with Asian Carmakers Corporation, the official importer and distributor of BMW in the Philippines, for a "majority stake" acquisition.

Ang, SMC president and chief operating officer, confirmed to the local bourse on Thursday, July 6, that he was invited by Palawan Governor Jose Alvarez, also a businessman, to acquire a majority stake in Asian Carmakers.

"We confirm that San Miguel Corporation is in talks with [Alvarez] and Asian Carmakers Corporation for an investment by the company, as advised by Mr Ramon S. Ang," San Miguel told the Philippine Stock Exchange (PSE).

Ang, a known car enthusiast, confirmed the agreement is scheduled to be finalized in July.

The BMW Group appointed Asian Carmakers as both importer and service provider of BMW cars in the country in 1993. Alvarez obtained control of Asian Carmakers from the BMW Group on February 1, 2009, based on data from the Chamber of Automotive Manufacturers of the Philippines Incorporated (CAMPI).

Asian Carmakers is a wholly owned Filipino company under the Alvarez Group of Companies. Alvarez also serves as the chairman of Columbian Autocar Corporation, the assembler and distributor of Kia vehicles in the Philippines.

The company boasts the widest dealership network in the luxury vehicle segment – with 8 dealers under the Asian Carmakers helm: Autoallee BMW in Eton Centris (EDSA), Autohaus BMW in Quezon City, Autozentrum BMW in Alabang, Prestige Cars in Makati, Premier Cars BMW in Pampanga, Autobahn BMW in Bacolod, Autowelt BMW in Cebu, and Premium Motoren BMW in Cagayan de Oro.

Meanwhile, San Miguel has business interests in brewery, food, packaging, oil, power, and infrastructure.

By end-2017, San Miguel 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.

The diversified conglomerate saw its net income in 2016 surge by 80% to P52 billion from P28.9 billion in 2015, as most of its units delivered strong growth.– Rappler.com

MANILA, Philippines – Businessman Dennis Uy's Phoenix Petroleum Philippines Incorporated approved the acquisition of Petronas Energy Philippines Incorporated (PEPI) and Duta Incorporated for $126.1 million (P6.40 billion).

But before Phoenix can implement the $126.1-million acquisition deals, the oil refiner will need the approval of the Philippine Competition Commission (PCC)– the country's antitrust regulator.

"Today, the company's Board of Directors has approved and authorized the execution of two agreements for the acquisition of PEPI and Duta subject to PCC approval," the company said in a disclosure.

Last May 24, a memorandum of understanding was signed by Phoenix and PDB (Netherlands) BV, a wholly-owned subsidiary of Petronas Dagangan Berhad, in relation to the planned 100% share acquisition of PEPI and its affiliate, Duta.

"The Board of Directors of Phoenix wishes to announce that on July 5, 2017, it has approved and authorized the execution of two agreements for the purchase of 100% shares owned by PDB (Netherlands) in PEPI and 100% shares in Duta for a total purchase price of $126.1 million, subject to price adjustment," the Uy-led company said.

Duta is 40% owned by PDB Netherlands and 60% owned by Alsons Consolidated Resources Incorporated and Masaligan Incorporated.

PEPI, meanwhile, is engaged in the liquefied petroleum gas (LPG) business.

Phoenix said the acquisition "broadens its product portfolio and petroleum presence across the country, with cross selling opportunities in fuel and LPG to consumers and corporates." – Rappler.com

$1 = P50.75

MANILA, Philippines – From a fall in April, the administration of President Rodrigo Duterte recorded its fastest infrastructure spending in 6 months last May, as it completed more road projects and bought more military equipment.

Latest data from the Department of Budget and Management (DBM) showed infrastructure and other capital expenditures rose by 31.4% in May alone, due to completed road construction, repair, and rehabilitation; flood control infrastructure; and requirements for the purchase of anti-submarine helicopters under the Armed Forces of the Philippines (AFP) Modernization Program.

This is the government's highest infrastructure spending since November 2016, when it booked a 49.3% surge.

This contributes to the 8.1% jump in infrastructure spending in the 1st 5 months of 2017, amounting to P197.2 billion.

To meet its 1st half program for infrastructure expenditures and capital outlays of P236.6 billion, the government must have spent P39.4 billion for infrastructure in June alone.

Total government expenses

Meanwhile, total government expenditures as of end-May totaled P1.06 trillion, 6% higher than the P1 trillion recorded in the same period in 2016.

The administration will have to spend P276.8 billion in June to meet its spending program of P1.337 trillion for the 1st half of 2017.

In the 2nd half of the year, the government plans to spend a total of P1.572 trillion, of which P801.1 billion is seen to be spent in the 3rd quarter, while the remaining P771.1 billion is expected to be spent during the 4th quarter.

This brings the total disbursement program to P2.909 trillion. (READ: First Metro, UA&P lower Philippine GDP forecast due to slow spending)

"Disbursements are expected to gradually gather speed in the succeeding months. Seasonally, spending usually picks up during the 3rd month of the quarter as line agencies speed up the utilization of their notices of cash allocations before they lapse at the last working day of the quarter," the DBM said in a statement on Thursday, July 6.

"Moreover, agencies are expected to implement catch-up plans or measures to recover from the delays encountered in the earlier months and these could further improve their disbursement levels," it added.

The Duterte administration has earmarked P8.2 trillion for 6 years' time solely to fund its ambitious infrastructure program called Build, Build, Build. – Rappler.com

MANILA, Philippine – China Eastern Airlines, China’s second largest carrier, will start flying out of Clark airport in Pampanga on October 18, the Clark International Airport Corporation (CIAC)  announced on Friday July 7.

CIAC said in a statement that the new Clark to Pudong, Shanghai route comes on the heels of a deal between CIAC and China Eastern to augment the airline's flight network and use Clark airport as one of its global hubs.

“The great news is that travelers from North and Central Luzon may now fly China Eastern from Clark to Shanghai and easily connect to the US and other major destinations in Europe and Asia and other international routes,” CIAC president and CEO Alexander Cauguiran said.

China Eastern Airlines is a legacy carrier with a strong presence on routes in Asia, North America, and Australia.

The announcement also comes amid increasing Chinese tourist arrivals to the country.

The Department of Tourism (DOT) counts China as the 3rd largest market for Philippine tourism.  In May, China accounted for 73,649 visitors – a growth of 57.29% compared to the 46,825 visitors from the regional giant who visited the Philippines in the same month last year.

The DOT expects the number of Chinese tourists arrivals to double this year, in view of warmer ties between the Philippines and China under the Duterte administration.

The CIAC also reported that Clark airport has seen increasing passenger traffic –  632,713 passengers and 4,603 domestic and international flights in the first 5 months of the year compared to 950,732 passengers for local and foreign routes for the whole of 2016.

The airport handles 130 international flights and 114 domestic flights weekly. Passenger traffic is projected to reach 1.5 million in 2017.

Cauguiran said that negotiations for direct flights from Clark to the US, Japan, Beijing, Kuala Lumpur, Taiwan and Thailand are ongoing.

The airport is also set for an upgrade with the construction of the airport's new terminal building, which would allow it to handle 8 million passengers annually. It's  scheduled or completion by the first quarter of 2020.– Rappler.com

MANILA, Philippines –  The Manila Electric Company (Meralco) on Friday, July 7, announced a slight increase in electricity rates for July.

The country’s largest power distributor announced in a statement that power rates will increase by P0.0761 per kilowatt hour (kWh) this month.

Meralco said the increase corresponds to a P15-increase in the total bill of a typical residential household consuming 200kWh. The overall rate, it said, is comparable to the January 2010 level.

Meralco said the July rate reflects the refund of overrecovery on pass-through charges from January 2014 to December 2016, totaling around P6.9 billion.

The refund will not be shown as a separate line item in the bill but is embedded in the different pass-through charges indicated in the bill, which include generation, transmission, and system loss charges; and lifeline and senior citizen subsidies.

For residential customers, the refund translates to a reduction of P0.79 per kWh, excluding taxes.

Bill components

Meralco said the overall generation charge increased by P0.0799 per kWh to P3.9385 per kWh in July from P3.8586 per kWh in June, mainly due to higher independent power roducers (IPPs) and wholesale electricity spot market (WESM) charges. 

The cost of power sourced from the IPPs increased by P0.1751 per kWh due to the peso depreciation and lower plant dispatch.

Despite the impact of peso depreciation, the cost of power from power supply agreements decreased by P0.0176 per kWh due to lower coal prices and improved average plant dispatch.

There was also an increase of P0.0042 per kWh in the transmission charge of residential customers, while taxes and other charges went down by a combined amount of around P0.0080 per kWh.

Meralco said distribution, supply, and metering charges remained unchanged for 24 months since July 2015. – Rappler.com

MANILA, Philippines – The Bankers Association of the Philippines (BAP) announced that member banks with branches in areas affected by the recent Leyte earthquake will "deliver normal banking operations" to serve clients.

"We endeavor to deliver normal banking operations particularly in the areas that were most affected," the BAP said in a public service announcement on Saturday, July 8.

These areas include the provinces of Leyte, Cebu, Bohol, and other nearby provinces affected by this week's magnitude 6.5 earthquake.

The earthquake that killed at least two people struck off Jaro, Leyte, at 4:03 pm Thursday, July 6. (READ: Metro Manila should learn from Leyte earthquake – Phivolcs)

"Our member banks have advised its respective branches to strive delivering its services to the general public and accommodate all banking transactions, most especially in this time of need," the BAP said.

The Bangko Sentral ng Pilipinas (BSP), meanwhile, said it is already assessing the situation in the affected areas, with banks evaluating the earthquake's impact on their operations.

"Banks are assessing the damage but our banks are geared to recover quickly as soon as possible," BSP Governor Nestor Espenilla Jr said.

The BSP has issued guidelines requiring banks and financial institutions to devise their own business continuity management plans to ensure that bank operations can withstand major disruptions like earthquakes. – Rappler.com

MANILA, Philippines – Middleweight regions, or those with populations of 500,000 to 5 million, are the next big bet for growth in the Association of Southeast Asian Nations (ASEAN), according to a recent consumer report.

The report, titled "Rethinking ASEAN," also dispelled common beliefs that megacities like Manila, Bangkok, and Jakarta were ASEAN's sole growth hotspots. 

The study was done by the global performance management company Nielsen NV and the strategy advisory firm AlphaBeta. It was released to the media on Wednesday, July 5. 

"Up to half of the top 10 markets in many consumer goods categories are from regions with less than 5 million people," the report said. 

"While ASEAN has been enjoying economic recognition in recent years, businesses tend to view it as a single entity and surprisingly, little is known about the many cities and regions that make up the archipelago," said Patrick Dodd, president of Nielsen Growth Market Groups. 

He added, "It's time for companies to look beyond megacities to see the growth opportunity hotspots within middleweight regions…This makes it crucial for companies to take a granular approach to understanding market opportunities in ASEAN."

The study also stated that contrary to the notion that Indonesia was the biggest market in ASEAN, the Philippines had a greater share of demand for major commodities.

Growth drivers

The report attributed growth from the middle regions to 6 main factors:

• cross border trade and logistics
• presence of economic clusters and business process outsourcing areas
• rise of satellite regions
• tourism
• a growing consumer base
• rich natural resources

Dodd explained that growth in these middleweight regions was likewise a combination of these growth-drivers, and allowed for regions other than megacities to become consumer hotspots. 

It added that companies, which look into growing its presence in ASEAN needed to study countries not just at a national level, but also at more regional and local levels.

According to the study, different consumer landscapes are present in regions within a country citing, "Growth rates can be more than seven times larger for some regions within countries than the national average."

In addition to this, the report stated that several ASEAN cities may also possess larger consumer demand growth than countries themselves by 2030. 

Dodd said this showed the need for companies to take a more granular approach when looking into ASEAN and its countries.

"While country-level analysis provides a holistic view of the market landscape, it does not show demand growth between regions within a country, which can differ substantially," said Dodd.

He added, "When targeting consumer markets, looking at country-level data doesn’t cut it anymore."

The report studied current and potential consumer demands for over 700 cities and regions of the 7 largest ASEAN economies: Indonesia, Thailand, Malaysia, Singapore, Philippines, Vietnam, and Myanmar to forecast the region's growth hostpots to 2030. 

The study classified 3 main tiers for cities according to population size, namely, megacities with a population of over 5 million; large middleweight regions, which have populations of one million to 5 million; and small middleweight regions with populations of 500,000 to one million. 

It covered demand for 10 product categories including chocolate, instant noodles, carbonated soft drinks, beer, cigarettes, shampoo, laundry detergent, baby diapers, facial mosturizer, and vitamins. – Rappler.com 

MANILA, Philippines – The Power Sector Assets and Liabilities Management Corporation (PSALM) plans to collect from consumers a universal charge of P0.0429 per kilowatt hour (kWh) a month for one year, in a bid to pay off the P3.7-billion stranded debt of the National Power Corporation (Napocor).

PSALM is now seeking approval from the Energy Regulatory Commission (ERC) for the planned move. This was stated in PSALM's petition for the availment of Napocor's stranded contract costs (SCC) portion of the universal charge for 2016.

It was in 2008 when the government transferred Napocor's assets and debt to PSALM.

"The calculated universal charge-SCC for the calendar year 2016 amounts to P3,686,192,736.05, which is equivalent to P0.0429 per kWh covering a one-year recovery period," PSALM said.

PSALM added that the 2016 universal charge-stranded debt adjustment was calculated based on the projected energy sales of 85,935 gigawatt-hours (GWh).

"The universal charge-SCC rate for 2016 is derived by dividing the calculated 2016 SCC by one-year electricity sales forecast for 2018 based on the Power Development Plan 2015-2030," the petition read.

Under Section 34 of the Electric Power Industry Reform Act (EPIRA), a universal charge will be imposed on all electricity consumers to cover payment of Napocor's stranded debt and SCC.

Stranded contract costs are the excess of Napocor's contracted cost of electricity with independent power producers over the actual selling price of the output. Stranded debt, meanwhile, is Napocor's unpaid obligations that were not liquidated by proceeds from the sale of its assets. (READ: Politics behind P30-B power coops' debt to PSALM?)

The universal charge is a separate line item in consumers' electric bills. It has different subcomponents, depending on the utilization of the funds as specified in the universal charge collection.

Revenues inadequate

PSALM said the revenues from the sale of electricity of its remaining assets are not enough to cover its operations and provide funds for the payment of Napocor's loan obligations.

To address the funding gap, PSALM said it is "forced to resort to temporary solution by borrowing that entails borrowing costs, which, in turn, will form part of the universal charge-stranded debt (UC-SD), effectively increasing the universal charge burden of all electricity users."

"But if PSALM would be allowed to immediately recover the UC-SD under its petition through provisional approval, new loans and refinancing to service maturing debts and lease obligations would lessen," it added.

PSALM said it wants the ERC to grant provisional authority, which would enable it to accumulate sufficient funds to service loan obligations that were incurred for the eligible independent power producer (IPP) contracts.

"Early SCC recovery will likewise translate to substantial savings on borrowing costs, as PSALM need not resort to refinancing to service the eligible IPP obligations and maturing debts," PSALM's petition read.

PSALM is the state agency tasked to privatize Napocor's power assets to help generate funds to pay off Napocor's debts. It is authorized to impose the universal charge on all end-users to compensate for any remaining deficit.

It is also mandated by law to calculate the amount of the stranded debts and stranded contract costs of Napocor, which is the basis for the ERC in determining the universal charge. – Rappler.com

MANILA, Philippines – The drawn-out battle between government forces and terrorists in Marawi City, Lanao del Sur may derail the business process outsourcing (BPO) industry's growth projections, according to the Information Technology and Business Process Association of the Philippines (IBPAP).

IBPAP urged the government to quickly resolve the crisis in Marawi City, saying that it could hurt the industry's growth projections if it drags on further. (READ: Businesses think SC decision on Mindanao martial law 'necessary')

Based on its latest roadmap, IBPAP sees 1.8 million workers and about $40 billion in revenues in the Philippines' BPO sector by end-2022. So far, IBPAP president Rey Untal said the industry remains on track to achieve these goals. It must add 100,000 workers every year to meet its 2022 target.

But Untal noted that there has been a slight slowdown in industry growth in recent quarters, which he attributed to the Duterte administration's anti-United States rhetoric in late 2016, and to the Trump administration being protectionist.

Untal said these resulted in a wait-and-see stance for would-be investors in the Philippine IT and BPO industry.

Growth 'not as fast'

IBPAP had observed in its meetings with investors last April and May that the "tide was changing and growth is happening, though arguably not as fast."

Untal said the Marawi crisis aggravated by the attack on Resorts World Manila last June "are not helping."

"While obviously these are isolated events we want it over soon so [we could] go back to business as usual... The security issue is still fresh... it becomes a question. It's a recent topic that cannot be avoided in the conversation. We hope we get over that so [we could] go back to doing business and [remove all the] noise," Untal said.

He did note that investors are still bullish about the Philippines. (READ: 'Normal working day' for businesses amid martial law in Mindanao)

"We have met with potential investors and there is continued business confidence," he said.

In Mindanao, which has been placed under martial law because of the Marawi crisis, Untal said BPOs located in Cagayan de Oro and Davao are operating as usual.

"The roadmap articulates a number of headwinds ... which we have factored in, like global trends [and] artificial intelligence. But security has not been included. In business [security risks] are not predictable," Untal added.

Since May 23, Marawi has witnessed numerous ground and air assaults, including gunfire exchanges, bomb explosions, and air strikes, leaving large parts of the city destroyed and over 400 people, mostly terrorists, killed so far.– Rappler.com

MANILA, Philippines – 2GO Group Incorporated appointed a new chief financial officer and treasurer, following adjustments in its reported net income for 2015 and 2016.

The listed logistics company told the Philippine Stock Exchange (PSE) late Friday, July 7, that its board of directors appointed William Charles Howell as CFO and treasurer to replace Jeremias Jeremias Cruzabra, who had resigned.

After a special audit, 2GO also reported a restatement of its financial performance for 2015 and 2016, as well as the unaudited financial statements for the 1st quarter of 2017. (READ: How SM Investments acquired stake in 2GO)

In its special audit, 2GO reported its net income actually stood at P109.131 million in 2015. This is a 90% decline from the P1.08-billion profit 2GO earlier reported in its 2015 annual report. 

For 2016, 2GO said in the disclosure that its restated net income is P344.035 million, 74% lower than what was reported in its 2016 annual report.

"The restatement is a commitment of the new management and board of directors to raise corporate governance standards in the company," Dennis Uy, the newly-appointed president of 2GO, said.

"The potential of 2GO to grow and be a major player in this dynamic shipping and logistics industry remains intact," Uy added.

Requiring restatement

For the 1st 3 months of 2017, the new management of 2GO said the company should have announced a net loss of P264.86 million, rather than a profit of P267.562 million.

"Soon after we took over the management of the company, we engaged SGV and Company to audit the company's balance sheet and income statement as of the closing date to ensure fair presentation of financial statements and establish accountabilities," Uy said.

The new 2GO president said the audit showed that certain accounts in the previously audited financials required restatement.

"[T]he new management, with the support and approval of the newly-elected members of the audit committee and board of directors, agreed to restate prior period financial statements to reflect fairly the state of the business," Uy said.

The local bourse announced it is set to implement a trading suspension on 2GO shares on Monday, July 10, pending the firm's submission of more data.

Uy was appointed by 2GO's board of directors in a meeting last April 7, after the decision of Sulficio Tagud Jr to retire both from the management and the board. 

Uy also serves as the chairman of Udenna Corporation, the parent firm of Phoenix Petroleum and Chelsea Logistics Corporation. 

Udenna Corporation owns 31% of KGLI-NM Holdings Incorporated, which in turn, has a 60% stake in 2GO's parent firm, Negros Navigation Company Incorporated. – Rappler.com