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Gov’t borrowings surge in September

BW FILE PHOTO

THE NATIONAL GOVERNMENT’S (NG) gross borrowings  spiked in September as its dollar bond issuance drove up foreign debt, the Bureau of the Treasury (BTr) said.

Data from the BTr showed that total gross borrowings soared by 255.64% to P367.18 billion in September from P103.25 billion in the same month a year ago.

Month on month, gross borrowings more than doubled from P174.03 billion in August.

The bulk or 60% of September’s gross borrowings came from external sources.

Gross external debt surged to P221.98 billion in September from P11.18 billion last year.

External borrowings in September included P140.99 billion in global bonds, P72.65 billion in program loans, and P8.35 billion in new project loans.

On the other hand, gross domestic borrowings jumped by 57.71% to P145.2 billion in September from P92.07 billion a year earlier.

This consisted of P120 billion in fixed-rate Treasury bonds (T-bonds) and P25.2 billion in Treasury bills (T-bills).

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the surge in September borrowings was mainly due to the latest dollar bond issuance.

In August, the government raised $2.5 billion from the issuance of triple-tranche US dollar-denominated global bonds. The transaction, which was finalized in September, was the country’s second foray into the international debt market this year.

The beginning of the easing cycle of the Bangko Sentral ng Pilipinas (BSP) and US Federal Reserve also supported the spike in domestic borrowings in September amid “favorable” borrowing costs, Mr. Ricafort said.

“US and local government bond yields posted bigger declines than the policy rates, resulting in more savings for the government and other borrowers, and making it more attractive to hedge immediate borrowing requirements,” Mr. Ricafort said in a Viber message.

Since starting its easing cycle in August, the BSP has lowered borrowing costs by a total of 50 basis points (bps), bringing the key policy rate to 6%.

For its part, the US Federal Reserve last month slashed interest rates by 50 bps to the 4.75% to 5% range.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said the government needed to ramp up its borrowings in September to fund the wider fiscal gap.

“The increase in external gross borrowings may be from the need to reduce budget deficits alongside fiscal consolidation and enhanced revenue generation,” he said in a Viber message.

For the first nine months of 2024, the budget deficit narrowed by 1.35% to P970.2 billion from P983.5 billion a year ago.

“External and domestic borrowings may also be used for unplanned expenses such as calamity response, recovery expenses, and sustained infrastructure investments,” Mr. Rivera added.

NINE-MONTH PERIOD
Meanwhile, the BTr reported that gross borrowings in the January-September period jumped by 31.42% to P2.3 trillion from P1.75 trillion last year.

The majority or 78.07% of gross borrowings in the nine-month period were from domestic sources.

Domestic debt as of end-September stood at P1.8 trillion, up by 33.55% from P1.34 trillion in the same period a year ago.

These were made up of P1.02 trillion in fixed-rate T-bonds, P584.86 billion in retail T-bonds, and P186.92 billion in T-bills.

External debt in the first nine months rose by 24.33% to P504.45 billion from P405.74 billion a year prior.

This was composed of P256.24 billion in global bonds, P173.15 billion in program loans, and P75.06 billion in new project loans.

Further rate cuts will likely encourage more borrowings in the last three months of 2024, Mr. Ricafort said.

“As interest rates globally and locally would continue to decline in the coming months, this would make borrowings more attractive, in view of the need to constantly finance future budget deficits.”

This year’s borrowing plan is set at P2.57 trillion, with P1.92 trillion coming from domestic sources and P646.08 billion from overseas, according to the latest Budget of Expenditures and Sources of Financing data. — Beatriz Marie D. Cruz

Vehicle sales to grow by at least 10% next year

New car models are displayed at an auto show in Pasay City, April 4, 2024. — PHILIPPINE STAR/RYAN BALDEMOR

By Justine Irish D. Tabile, Reporter

NEW VEHICLE SALES are expected to grow by at least 10% next year with the launch of new models, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI). 

“Well, easily, total industry sales will increase by 10% next year,” CAMPI President Rommel R. Gutierrez told reporters on the sidelines of the 9th Philippine International Motor Show last week.

For this year, CAMPI has set a sales target of 468,300 units, but hopes it can reach as much as 500,000.

“Our target was 468,000, and it looks like we can do it. [The] 500,000 is an aspirational figure. But if [we can’t reach that] this year, most likely next year because we are almost there. We still have a lot of product launches,” Mr. Gutierrez said.

In the first nine months of the year, vehicle sales grew by 9.4% to 344,307 units from 314,843 units in the same period last year, data from the joint report by CAMPI and the Truck Manufacturers Association (TMA) showed.

The total sales for the January-to-September period already represent 73.5% of the industry’s sales target for the year.

However, the latest report also showed that the growth in sales of commercial vehicles was flat at 29,104 last month, bringing the total sales’ year-on-year growth to 2.4% at 39,542.

Despite this, Toyota Motor Philippines Corp. Head of Marketing Services Elvin G. Luciano said that this is not of concern as demand for Toyota commercial vehicles is still strong. 

“So far, for Toyota, the commercial vehicle sales are steadily strong. There is a heavy demand for our commercial vehicles,” Mr. Luciano told BusinessWorld on the sidelines of Toyota’s Beyond Zero Media Presentation on Saturday.

In the January-to-September period, Toyota remained the market leader with sales of 159,088 units, up 10.3% from 144,232 units a year ago. The car manufacturer’s sales accounted for 46.2% of the industry’s total.

Broken down, Toyota saw a 6.9% increase in commercial vehicle sales to 111,541 in the first nine months and a 19.1% jump in passenger car sales to 47,547 units.

“We are targeting more than 200,000 sales this year. Historically, sales are stronger during the ‘ber’ months as there is higher consideration for vehicle purchases, especially come December,” said Mr. Luciano.

“We are also banking on our new hybrid models. We just launched the full electrified lineup this year and Corolla Cross and Yaris Cross are among our main drivers for hybrid sales,” he added.

Industrywide, Mr. Gutierrez said that the industry is expected to sell over 10,000 units of electrified models this year.

“Last year we sold 10,000 units of hybrid and pure electric vehicles (EVs), but the pure EVs only accounted for less than 500,” he said.

“But definitely, that 10,000 will be surpassed this year. I think on average, we are confident that [EV sales] will be 10% higher than last year,” he added.

Mr. Gutierrez said, however, that the sales will still be dominated by hybrid vehicle sales, accounting for 75%.

However, Mr. Gutierrez said that only 30% of the vehicles sold by the industry are being manufactured locally.

“It’s still around 30%. It’s a bit steady because Toyota Vios and Innova are still here, and their production is around 60,000 a year,” he said.

The latest report from the Association of Southeast Asian Nations (ASEAN) Automotive Federation showed that the country has so far produced 75,644 motor vehicles in the first seven months. This represents a 15.2% increase from the 65,664 units it produced in the same period last year.

Despite the growth, the country’s total production was still smaller compared to that of Thailand (886,069), Indonesia (671,311), Malaysia (462,347), and Vietnam (86,173).

Because of this, Mr. Gutierrez said that the industry wants the Philippine government to continue to implement a Comprehensive Automotive Resurgence Strategy (CARS)-like program.

“Because again we still need the support of the government for local manufacturing. Especially now that the CBUs (or completely built units) are becoming more competitive,” he said.

“Local manufacturing needs support from the government in order to maintain its viability both for EVs and non-EVs. The government is supportive of manufacturing. I am sure we are looking at various incentive schemes by the government,” he added.

Philippine Stock Exchange expects six IPOs in 2025

Philippine Stock Exchange, Inc. is expecting six initial public offerings for 2025. — BW FILE PHOTO

THE PHILIPPINE Stock Exchange, Inc. (PSE) is expecting to have six initial public offerings (IPOs) for 2025, according to its top official. 

“I think we can do six IPOs for next year. I hope we can get three or four big ones and then maybe some small and medium ones,” PSE President and Chief Executive Officer Ramon S. Monzon told reporters on the sidelines of a forum in Taguig City last week.

Mr. Monzon said west zone water concessionaire Maynilad Water Services, Inc. and the owner of integrated resort Okada Manila are some of the expected IPOs next year.

“We have Maynilad. I have been talking to them. We’ll try to see if Okada Manila (can list as well),” he said.

Under its legislative franchise, Maynilad needs to become a publicly listed firm on or before 2027 and offer at least 30% of its outstanding capital stocks within five years from the grant of the franchise.

The PSE will likely miss its goal of six IPOs for 2024 as there have only been three IPOs so far, namely, gold and copper mining company OceanaGold (Philippines), Inc. as well as renewable energy companies Citicore Renewable Energy Corp., and NexGen Energy Corp.

The local bourse is set to have its fourth public listing in November with the planned IPO of Cebu-based fuel retailer Top Line Business Development Corp.

Some of the highly anticipated companies that have deferred their public listing plans include the real estate investment trust of the Sy-family’s SM Prime Holdings, Inc., Razon-led Prime Infrastructure Capital, Inc., and electronic wallet GCash.

Meanwhile, Mr. Monzon said the PSE is expecting to raise up to P150 billion in capital for 2025.

“Next year, if the market is still like what it is now, it can do P140 [billion] to P150 billion in capital raising,” he said.

Capital raised in the PSE is expected to reach P89 billion this year, according to Mr. Monzon, which is lower than the market operator’s target of P175 billion.

Analysts are anticipating better market conditions next year as the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) have started their easing cycles.

The BSP has so far slashed borrowing costs by a total of 50 bps since August, bringing the key rate to 6%. — Revin Mikhael D. Ochave

PBC&E celebrates 50 years of business excellence

Leaders in business celebrate 50 years of Philippine business excellence. Leading this year’s celebration is 50th Philippine Business Conference and Expo Chairman and PCCI Vice-President for International Affairs Raymund Jude Aguilar (11th from left in photo) and PCCI President Consul Enunina V. Mangio (10th from left). Also in photo (from left): Assistant Treasurer Bernardo Benedicto III, Corporate Secretary Atty. Pablo Gancayco, Secretary-General Ruben J. Pascual, Director for Labor Anthony Guerrero III, Director for Agriculture Dr. William Co, Director for Education Edgardo G. Lacson, Director for Tourism, Franchising, and Retail Samie S. Lim, Director for Mining Joseph Sy, Vice-President for Regional Affairs Alegria S. Limjoco, Chairman George T. Barcelon, Executive Vice-President and Director for Innovation Ferdinand Ferrer, Vice-President for Trade and Industry Michael Tan, Vice-President for Trade Facilitation Bryan Ang, Area Vice-President for Mindanao Elena U. Haw, Area Vice-President for Visayas Melanie Ng, Area Vice-President for South Luzon Sallie Lacson, Area Vice-President for North Luzon Atty. Maria Amalia Cayanan, and Area Vice-President for NCR Dr. Hernando Delizo

Spanning five decades of promoting transformative agenda for the country, the Philippine Chamber of Commerce and Industry (PCCI) recently celebrated 50 golden years of the Philippine Business Conference and Expo (PBC&E), the biggest and most-highly anticipated in the country.

Over 1,500 local and international delegates trooped to the Marriott Grand Ballroom for the said event with the theme “Embracing Innovation. Empowering Business. Enriching Lives” and chaired by PCCI Vice-President for International Affairs Raymund Jude G. Aguilar.

PCCI President Enunina V. Mangio welcomed the delegates as she underscored the role of PBC&E as an important platform where leaders in government, the private sector and other stakeholders converge to discuss paramount agenda of business growth and economic progress.

“Through the years, we have seen how the insights, ideas, and recommendations from this annual conference have played a critical role in fostering economic development, promoting trade and investments, and generating jobs that contribute to the growth of our nation,” Ms. Mangio said.

Mr. Aguilar acknowledged the contributions of the PBC&E over the years, becoming a venue where economic forces have traditionally converged to discuss concerns and create solutions to improve business and stimulate growth. He likewise gave tribute to past PCCI leaders for bringing the chamber movement to where it is today.

“From its birth in 1974, the PBC&E has become the venue where economic forces converge, delving into exciting topics on current and emerging issues of concern, new trends, exciting technologies and their implications on business,” Mr. Aguilar said.

Vice-President Sara Z. Duterte-Carpio led the opening ceremonies while Special Assistant to the President for Investment and Economic Affairs, Secretary Frederick D. Go ably represented President Ferdinand R. Marcos, Jr., who, unfortunately, was unable to grace the occasion as he had to attend to efforts related to Typhoon Kristine.

The two-day event was filled-up with renowned experts and visionaries led by one of Singapore’s well-known diplomats, Professor Kishore Mahbubani, alongside young and dynamic future business leaders. On the other hand, officials of key government agencies took turns in presenting the government’s agenda to the private sector.

Special Assistant to the President for Investment and Economic Affairs Secretary Frederick D. Go (2nd from left) graces the 50th PBC&E representing President Ferdinand R. Marcos, Jr. With him are (from left) PCCI President Enunina V. Mangio, PCCI Chairman George T. Barcelon and 50th PBC&E Chairman and PCCI Vice-President for International Affairs Jude Aguilar.

Mr. Marcos, in his message delivered by Mr. Go, underscored the important role of the business community in steering the country’s direction towards greater prosperity.

“The PBC&E embodies the enduring partnership between the government and the private sector, with our relationship built on mutual trust, respect, and a shared vision of equitable growth. None of this would be possible without the Philippine Chamber of Commerce and Industry. Your unwavering dedication to uplift the business sector mirrors this administration’s commitment to steer our economy towards greater prosperity,” Mr. Marcos said.

The President made a commitment to improve the business climate and elevate the status of the Philippines as a top investment destination. He assured the private sector that his government will continue to work to harmonize all efforts of all investment promotion agencies, government agencies, and local government units to create synergies.

Ms. Duterte, on the other hand, underscored the importance of innovation to business, adding that the government and private sector should collaborate to create innovation centers and foster an environment that encourages risk-taking and experimentation.

“Ultimately, humans should ensure that AI becomes our partner in improving our lives. We should consider the urgency of re-skilling and upskilling of our workers, and equip them with new skills in this technologically advancing environment,” Ms. Duterte said.

The conference successfully concluded with the handing over of the 10-point agenda of PCCI to President Marcos, which encapsulates the collective aspirations of the Philippine business to the new administration, particularly in steering the country towards a higher growth trajectory.

PCCI’s wishlist to government

At the culmination of the 50th PBCE, Mr. Aguilar handed over to Mr. Go the resolutions that focused on critical areas covering food security, human resources development, and investment generation aimed at enhancing the Philippines’ global competitiveness and ensuring the well-being of its citizens.

“These proposals are designed to foster an environment where businesses can thrive, investments can flow, and every Filipino can benefit from a more robust economy. We stand ready to work hand-in-hand with the government to turn these proposals into actionable policies,” Ms. Mangio said.

Ms. Mangio recognized that successful implementation of these resolutions requires the strong collaboration between the government, private sector, and local communities.

Achieving food security

Recognizing the need for a stable and sustainable food supply, the PCCI proposes a multi-faceted approach to bolster agricultural production and access to markets. Among the key initiatives are the establishment of a Technology Task Force, which will introduce modern farming technologies like climate control and precision farming. The resolution also calls for strengthening public-private partnerships (PPPs) and revitalizing key sectors such as coconut, hog, and aquaculture industries through financial aid programs, disease control measures, and support for cooperatives.

Furthermore, it seeks to amend the Agrarian Reform Law, advocating for an increase in the land retention limit from 5 to 24 hectares to promote larger, more efficient farming operations.

Human resources development

Aimed at creating a more skilled and capable workforce, the PCCI urges reforms in the education system and healthcare sector to create a more skilled and capable workforce. The organization proposes amendments to the Philippine Qualifications Framework (PQF) Law, calling for the establishment of a Philippine Qualifications Authority to ensure that the tri-focalized education agencies coordinate and work together so that educational outcomes align with industry needs.

To foster innovation, the PCCI is pushing for the establishment of Research and Development Centers within the Department of Education, the Technical Education and Skills Development Authority, and the Commission on Higher Education; as well as the enhancement of curricula through collaboration with global technology and research and development companies.

In healthcare, the chamber emphasizes the need for improved facilities, particularly in underserved regions, and a stronger focus on tackling malnutrition through community-wide campaigns.

Investment promotion and job creation

The PCCI also outlines strategies for attracting more investments and generating jobs. This includes advocating for comprehensive investment promotion legislation that will provide incentives for key sectors such as manufacturing and green technologies. The resolutions emphasize the importance of improving infrastructure particularly in logistics, ensuring energy availability while maintaining competitive costs, and digitalizing local government services to streamline processes and attract more investors.

The PCCI is committed to working with the government to develop a long-term Infrastructure Master Plan that will enhance transportation, energy, and communication networks

“We at the PCCI believe that we have what it takes to become one of the most robust economies in the world. Through the resolutions that we have submitted, we offer doable recommendations, proposed legislations and executive actions to guide our economic managers to ensure sustainable economic development and societal progress,” Mr. Aguilar said.

CICC, JuanHand join forces for safer online lending environment

L-R: FinVolution Group Head of International Business Xiaodong Sun, WeFund Lending Corp. (JuanHand) President and CEO Francisco “Coco” D. Mauricio, CICC Undersecretary & Executive Director Alexander K. Ramos, CICC Highly Technical Consultant Justice Andres B. Reyes, Jr. (Ret.), and CICC Private Sector Representative Atty. Roy D. Ibay

The Cybercrime Investigation and Coordinating Center (CICC) has joined forces with online lending platform JuanHand. This partnership is dedicated to serving and protecting the underserved yet creditworthy segment of the population and foster a safe and secure online lending environment.

A Memorandum of Agreement (MOA) was formally signed on Oct. 18 at the National Cybercrime Hub in Taguig City. This innovative framework establishes a commitment from both parties to enhance their efforts in combating cybercrime offenses and instances of fraud specifically in the fintech lending sphere. JuanHand and CICC will develop a data and information sharing mechanism that promotes operational and technical cooperation. Both parties will also synergize their efforts in combating cybercrime activities, improving cyber capabilities and accelerating digitalization initiatives, specifically in the fintech lending space.

Present during this landmark partnership were key representatives from CICC, headed by Executive Director Undersecretary Alexander Ramos and Director Alvin Navarro. Officials from JuanHand were also present, led by President and Chief Executive Officer Francisco “Coco” Mauricio and FinVolution Group’s Head of International Business Xiaodong Sun.

This MOA is a first of its kind for the CICC, a milestone toward onboarding more fintech partners in the future.

“What we see in here, more so often, is the issue of collection. There are a lot of victims who are being harassed by unscrupulous online platforms who are not even registered. And these are the concerns that we’d like to address because kawawa naman ‘yong ating mga kababayan,” Mr. Ramos was quoted saying during the signing event.

“We would like to help them by leaving them to the registered platforms, that they shouldn’t fall victim to just any application offering financial services. Though it will be small loans, for example, P20,000, they end up paying P100,000. That’s too much. Too predatory,”, he added.

JuanHand’s Mr. Mauricio elaborated on the need for a fair lending environment. He noted that predatory actors have no place in the fintech lending industry and addressing the issues that hamper the online lending landscape must be addressed to boost consumer confidence.

“The last thing we want is to make the borrowing public or the underserved uncomfortable with online lending. Because if they’re uncomfortable, where would they go? Loan sharks, five-six? Those would expose them to deeper debt and worse harassment,” he added.

JuanHand offers microloans up to P50,000. These loans are payable up to nine months with competitive interest rates of less than 0.49% per day. Through WeFund Lending Corp., JuanHand is registered with and regulated by the Securities and Exchange Commission (SEC). It is also a founding member of the Consumer Lending Association of the Philippines (CLAP), the pioneer umbrella association of compliant and above-board fintech lending companies in the Philippines. Its parent company, FinVolution Group, is listed on the New York Stock Exchange (NYSE: FINV) and is present across established and emerging markets such as China, Indonesia, Philippines, Mexico and Pakistan.

“We want to position ourselves as a trusted, responsive, and reliable financial partner to all Filipinos. JuanHand is more than just a leader in the fintech lending sphere, but it is also a believer in the potential of the Filipinos, especially the underserved yet creditworthy segment of the population. We ultimately believe that financial literacy and inclusion lead to empowerment which then serves as an engine for national development,” said Mr. Mauricio.

Download JuanHand app now via IoS Appstore and Google Playstore or visit www.juanhand.com

 


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San Miguel unit takes over Sual coal-fired plant in Pangasinan

SMCGLOBALPOWER.COM

SUAL POWER, INC. (SPI) has taken over the 1,200-megawatt (MW) Sual Coal-Fired Thermal Power Plant in Pangasinan province after the contract between TeaM Energy Corp. and the government expired.

In a statement at the weekend, TeaM Energy said it handed over the power plant to the government through the Power Sector Assets and Liabilities Management Corp. (PSALM), and National Power Corp. (Napocor) on Oct. 25.

“For the past year, there has been close coordination with Napocor, PSALM and SPI to ensure a seamless transition process,” said Mitsuhiro Kojima, officer-in-charge at TeaM Energy. “The plant has been turned over in excellent condition, ready to continue generating electricity for the Luzon grid.”

SPI, a unit of San Miguel Global Power Holdings Corp. (SMGP) and the independent power producer administrator (IPPA) of the Sual facility, received the power plant from PSALM.

The power plant, the largest coal-fired power plant in the Philippines in terms of installed capacity, has been providing power to the Luzon grid since 1999 under a 25-year build-operate-transfer scheme that ended this year.

SPI, formerly known as San Miguel Electric Corp., entered an agreement with PSALM in 2009 allowed it to serve as the administrator of the Sual Power Plant.

SPI has the contractual right to manage, control, trade, sell or otherwise deal in up to 1,000 MW of the generation capacity of the power plant, according to SMGP.

After the transfer of the plant from TeaM Energy to PSALM, SPI then took over ownership of the plant, pursuant to the IPPA agreement.

“For more than 25 years, the Sual Power Station has contributed to the development of the Philippines by generating reliable, cost-effective energy that has energized homes, factories, offices, schools, and hospitals,” Mr. Kojima said.

The Sual plant was built in the 1990s to address growing power demand amid an energy crisis. Construction started in 1996, and the plant began operating three years later.

TeaM Energy, one of the country’s largest independent power producers, is a partnership between Japanese groups Tokyo Electric Power Co. and Marubeni Corp.

The company will continue to operate the 735-MW Pagbilao Power Station in Quezon province. It also has a 50% stake in the 420-MW Pagbilao Unit 3 power project. — Sheldeen Joy Talavera

Basic to complete Batangas wind project by early 2028

FREEPIK

BASIC ENERGY CORP. expects to complete its 50-megawatt (MW) wind power project in Mabini, Batangas by early 2028, its president said.

“The wind power project in Mabini, Batangas is moving forward as planned and on track for completion by the first quarter of 2028,” Basic Energy President and Chief Operating Officer Luisito V. Poblete told BusinessWorld in a Viber message. “Construction is likely by mid-2026.”

The Mabini wind power project covers 4,860 hectares in the Mabini peninsula in Batangas province south of the Philippine capital. The Department of Energy awarded the service contract to the company in 2021.

The contract is for 25 years, including a five-year pre-development phase, and may be extended for another 25 years.

Mr. Poblete said the project will cost $80-85 million. “Currently, initial exploratory discussions with potential funding institutions including local banks [are] under way,” he said.

Basic Energy seeks to complete the full feasibility study for the wind project by March 2025.

Mr. Poblete said the company has completed the grid connection assessment and has started the system impact study with the National Grid Corp. of the Philippines.

“There is enough capacity to accommodate the interconnection of the 50-MW WPP (wind power project),” he added.

In April, Basic Energy entered an agreement with Japanese renewable energy developer Renova, Inc. to form a joint venture for the development of the wind energy project.

Renova develops and operates renewable energy sources including solar, wind, biomass, geothermal and hydropower, according to its website. — Sheldeen Joy Talavera

Sansan to hire more software developers for office in Cebu

CORP-SANSAN.COM

SANSAN Global Development Center, Inc. targets to scale to more than 120 software developers at its office in Cebu in central Philippines.

“Since establishing the Sansan Global Development Center in Cebu in 2023, we have reached our initial target of hiring 70 software developers and are aiming to scale up to more than 120,” Jay Pegarido, director and country manager at Sansan Global Development Center, told BusinessWorld in an e-mail.

Sansan Global, part of Japanese cloud-based solution provider Sansan, Inc. is boosting its development capabilities to support global projects particularly in markets like Singapore and Thailand. The firm’s long-term objective is to position its Cebu office as a leading center for innovation and product development.

Sansan does not offer services in the Philippine market but has tapped the local talent to develop and enhance its products for international markets, particularly in Southeast Asia.

The expansion of the Cebu office shows the commitment of the firm to invest in the technology talent that the Philippines has to offer, Mr. Pegarido said.

“The Philippines boasts a strong educational infrastructure with a large number of information technology graduates each year, high English proficiency and a vibrant tech ecosystem,” he said.

But Mr. Pegarido cited challenges including the talent gap in areas such advanced data science, artificial intelligence and cybersecurity.

“There’s often a mismatch between the skills that graduates possess and those required by the industry, and Sansan addresses these challenges by investing in the training and development of our engineers,” he said.

The firm will continue to leverage the rich tech talent in the Philippines to drive global product development and innovation, as well as to support product development specifically tailored for the Japanese market, he added. — Aubrey Rose A. Inosante

Cebu Pacific signs purchase agreement for up to 152 aircraft order

Cebu Pacific (CEB) announces the signing of a landmark purchase agreement with Airbus and Pratt & Whitney, an RTX business, for up to 152 A321neo aircraft, equipped with Pratt & Whitney GTF engines.

The agreement with Airbus covers firm orders for up to 102 A321neo, plus 50 A320neo Family purchase rights.

This acquisition — which has a minimum commitment of 70 aircraft — is the largest in Philippine aviation history, valued at approximately USD 24 billion (P1.4 trillion) based on list prices for the entire 152 aircraft order. This purchase agreement reflects CEB’s unwavering optimism for the future of air travel and steadfast commitment to meeting the evolving needs of passengers.

“The selection of Airbus and Pratt & Whitney underscores our focus on operational efficiency, sustainability, and innovation, ensuring that we continue to deliver the highest standards of service while significantly reducing our carbon footprint,” said Michael Szucs, chief executive officer at Cebu Pacific. “This milestone signals our ongoing dedication to expanding air travel accessibility and affordability, while supporting the Philippines’ broader economic growth and connectivity goals.”

Airbus said the purchase agreement is a testament to the airline’s confidence in its products and a positive signal for the aviation industry’s recovery.

“The A320 Family has supported Cebu Pacific’s domestic and short-haul international network growth over the last two decades. We’re grateful to the airline for its continued endorsement of our bestselling single-aisle product line. The A321neo is highly regarded for its unparalleled economics, performance and fuel efficiency. We’re confident that these additional A321neo will contribute strongly to the all-Airbus operator’s next phase of expansion as one of Asia-Pacific’s leading low-cost carriers,” said Benoît de Saint-Exupéry, executive vice-president for sales of commercial aircraft business at Airbus.

“This latest order demonstrates the growing opportunities for aviation in the Philippines and the larger Asia Pacific region. The GTF engine will enable Cebu Pacific to continue to expand the number of routes it offers to passengers, while delivering industry-leading fuel efficiency and sustainability benefits,” said Rick Deurloo, president of commercial engines at Pratt & Whitney.

CEB was advised by Blue Skies Consultants on the new transactions with Airbus and Pratt & Whitney.

 


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The return of Philippine Fashion Week

PHILIPPINE FASHION WEEK unveils seven creations inspired by its new logo, crafted by designers Amir Sali, Jerome Salaya Ang, Jaggy Glarino, Ulysses King, Nina Ricci Eleazar, Jober’t Cristobal, and Cherry Veric.

Plans are afoot to expand beyond fashion

PHILIPPINE FASHION WEEK (PFW), an institution that has been around since the 1990s, had to take a break along with the rest of the world during the COVID-19 pandemic, which shut down most runways in 2020 and beyond. Prior to that, Philippine Fashion Week had already been reduced to showing in smaller venues, compared to the large extravaganzas held in convention centers in years past. In its wake, other institutions had taken up its mantle to be the premier platform for designers to show off their latest collections.

On Oct. 23, at the Ayala Museum, Philippine Fashion Week announced its return, with ambitions to turn even bigger than they were before. Aside from staging the usual runway shows, they presented plans to become a business incubator in seven sectors, namely: fashion, dining, beverages (wine and spirits), home, travel, arts and entertainment, and wellness.

“Philippine Fashion Week unfurls its wings from staging fashion events to offering new platforms for… incubating and launching fresh ideas in seven business segments in categories where style is most intrinsic,” said PFW Chief Vision Officer, Nikky Nicandro III in a speech. “Our new website will be business-centric. We would enable designers and collaborators to sell via our e-commerce site.”

Mr. Nicandro also said that they would collaborate with other fashion weeks of the world, while announcing an advocacy program for tailors, sewers, and other workers in the fashion industry, for them to be able to fill gaps in manufacturing.

Executive Producer Audie Espino, brother of PFC founder Joey Espino, said in a speech, “For the 25-plus years, that’s another book that we have finished. We are doing the sequel.”

Some designers already confirmed their presence at the new Philippine Fashion Week via displays during the event, showing off pieces on mannequins. They include Jerome Salaya Ang, Nina Ricci Eleazar, Jaggy Glarino, Jober’t Cristobal, Amir Sali, Ulysses King, and Cherry Veric.

Founder Joey Espino had not confirmed the dates for next year, and according to him, the shows themselves would be held on different stages, depending on the clothes and the audience. As for the number of days, this depends as they’re still adding designers to the list: “That doesn’t mean they’re the only ones who will present,” Mr. Espino told BusinessWorld.

Mr. Espino talked about why he feels the need for them to return: “Everyone is getting activated. I guess the effects of the pandemic have gone. The Filipino designers are now more ready.”

Speaking about the various fashion events that have popped up since their pause, he says, “From the very beginning, I started focusing on what would be best for everyone. I guess that’s what our country needs. I’m happy that fashion is active with all these other things happening, because at the end of the day, we have to make things all alive and kicking. I think they’re doing that share.”

He also discussed the delicate balance between art and business in fashion, and how that shapes the industry, and in turn, how it shapes this enterprise. “The pandemic has been a good eye-opener, and everybody learned their lessons. Seeing the journey with Philippine fashion, fashion shows were treated like entertainment, or meant to be talked about.

“Without the sales, without the money, people couldn’t do collections… the bottom line is business. If they don’t sell, they wouldn’t be able to do anything next.” — Joseph L. Garcia

PH1 eyes disruption through ‘First World’ experience

GIGI G. ALCANTARA

By Revin Mikhael D. Ochave, Reporter

GIGI G. ALCANTARA, president of PH1 World Developers, Inc., wants to disrupt the local property development scene by providing more value and bringing First World experience to Filipinos.

“When we said we wanted to disrupt the real estate sector, we’re veering away from the conventions through technology,” she told BusinessWorld in an interview at the company’s office in San Juan City.

“Majority of the developers that we have now in the Philippines would focus on the aesthetics, the amenities, and the lifestyle, which would be good,” she said. “PH1 is also focusing on those, while also bringing Filipinos closer to a First World development and experience from all touch points across all property segments.”

Ms. Alcantara said PH1 seeks to provide more value to Filipinos without sacrificing quality.

“The priority for discerning buyers is a strategic location,” she said. “But for the greater mass of buyers, it will still be quality and value for money. It’s something that is functional, something that will appreciate over time, something that will be convenient, and something that will give Filipinos the First World experience.”

“It might not be First World like Switzerland, but it’s already First World here in the Philippines.”

One of the features of PH1 condominium projects is the add-loft technology, which provides as much as 40% more space without any cost through loft design and engineering. Another is energy-efficient features such as solar panels, tinted windows and insulated walls.

“It’s really more value for money. I want PH1 to be the preferred real estate developer. That is the ultimate goal, to uplift not only Filipinos but even clients abroad, and make them experience First World living,” she said.

Ms. Alcantara, a behavioral science graduate from the University of Santo Tomas in Manila, said she manages her staff through collaborative leadership. “From someone who rose through the ranks, I put value in consensus building. I recognize the value of having ideas from everyone.”

“More heads are better than one. I want to learn from them. We learn from each other,” she added.

PH1 is the property unit of listed infrastructure group Megawide Construction Corp. Megawide acquired PH1 from Citicore Holdings Investments, Inc. in July 2023 for P5.2 billion as part of its expansion to the affordable housing segment.

Established as MySpace Properties, Inc. in 2014, the company was rebranded as PH1 in 2020 to reflect its aim of becoming a First World quality property developer. The company’s first project was The Hive residential condominium project in Taytay, Rizal launched in 2015.

Ms. Alcantara, who used to work for SM Development Corp. and Century Properties Group, said PH1 also wants to help cut the country’s 6.5-million housing backlog. “We are strengthening our alliance with the government and local government units for the Pambansang Pabahay Para sa Pilipino Housing (4PH) program. We will be very heavy with that in the next few years,” she said.

“We can help in the truest sense because we are going to hit the right pricing. When we say we can fulfill the backlog, we will try to deliver houses within the pricing of P1.8 to P2 million,” she added.

PH1 recently partnered with the local government of Imus City in Cavite province to develop a mid-rise housing project for government employees, policemen and teachers.

Ms. Alcantara wants the government of continue improving the ease of doing business and regulatory processes for faster issuance of permits. “We have to streamline permitting so that we can have more projects approved,” she said.

She is also pushing financing support for first-time homebuyers. “We want that for first-time buyers because we saw that our client base are now [made up] of Millennials, compared with before when it was the 40’s to 50’s segment,” she said.

PH1 is developing My Enso Lofts in Timog, Quezon City and the Modan Lofts condominium project in Taytay, Rizal. It is also developing its first housing project in Bulacan called Northscapes San Jose Del Monte.

The property developer also has a joint venture with Property Company of Friends, Inc. to build the One Lancaster Park condominium project in Imus, Cavite.

Education as the equalizing reform

PHILIPPINE STAR/JOHN RYAN BALDEMOR

The 1987 Constitution is pernicious for many reasons. Its Filipino First and Filipino Only provisions promoted concentration in the economy (monopolies and oligopolies) due to a lack of foreign competition. Its political model produced family dynasties and a ludicrous party-list system.

However, its emphasis on “social justice” through asset reform is just as pernicious.  The Constitution broadly calls for regulating “the acquisition, ownership, use, and disposition of property and its increments.” (Section 1, Article XIII). For farmers specifically, the Constitution calls for redistributive justice through an agrarian reform program (Section 4, Article XIII.)

In line with the 1987 Constitution, the Comprehensive Agrarian Reform Law (CARL) was passed in 1988.  What has been the effect of that law? According to international economists Tasso Adamopoulos and Diego Restuccia, who wrote for the prestigious National Bureau of Economic Research, CARL reduced average land size by 34% and agricultural productivity by 17%.  In other words, farmers became poorer. As National Scientist Dr. Raul Fabella describes the outcome of land reform, landless farmers became “impoverished landlords.”

The problem of social justice through asset reform is that it is zero-sum, i.e., the gain of some is a loss to others. The land to the landless is a loss to the landlord. Asset reform, therefore, creates uncertainty in property rights, dampening investment in agriculture.

The Filipino First and Filipino Only provisions and the asset reform aspects in the Constitution are understandable because the forces that deposed Marcos Sr. represented the anti-Marcos oligarchy, the Catholic Church, and leftist elements in society.

We must move away from the Yellow-leftist principles of the 1987 Constitution, which, after 47 years, had only given us a weak and corrupt state, impoverished farmers and low agricultural productivity, high inequality, an uncompetitive economy, and a political system dominated by dynasties. 

For social justice, I propose not asset reform but education as the equalizing reform. As I keep repeating, education is the only good that, when given, enhances the giver. It’s not zero-sum. When I teach somebody economics, for example, I can converse with him/her.  I can learn as much as I teach.  Education is a win-win.

Because education is a win-win, unlike asset reform, the ruling class will embrace it rather than resist it.

Education is lifelong. Unlike an asset, like land, which the recipient can dissipate, education doesn’t depreciate or become mishandled. When somebody learns how to read and write, that’s forever until that person dies. 

Education is also portable. It’s one thing that even refugees can bring with them. Perhaps for this reason, Jews, historically persecuted and exiled, emphasize education. Ironically, Palestinians also emphasize education, with their literacy rate among the highest in the Arab world. Our OFWs know that they bring only education and know-how when they move to other countries. Unfortunately, because Philippine education has been deteriorating, many of our OFWs work presently as domestic helpers or low-paid workers.

Most of all, education is essential for inclusive economic growth. Higher productivity and, therefore, higher-paying jobs require education, which is significantly truer now in the age of robotics and artificial intelligence. Physical labor won’t be enough to operate machines or computers.  Lack of education condemns people to poverty or low-end jobs.

This is why the parlous state of Philippine education is so concerning. Our economy, based on a Filipino First and social justice mentality, did not emphasize education. The state of Philippine education is so bad it can make one cry. According to the World Bank, our learning poverty rate is 90%. This means 90% of our 10-year-olds cannot grasp age-appropriate text and concepts. The Philippines ranks near the bottom of the PISA (Programme for International Student Assessment) tests given to 15-year-olds for reading, science, and mathematics among 81 countries.

EDCOM Executive Director Karl Yee also paints a grim picture of the state of Philippine education. He says the learning gap of students is about 5.5 years. Grade 8 students struggle with basic concepts of multiplication and subtraction.

Therefore, the sad state of Philippine education poses a massive problem for the Philippine economy.  It might be a big reason investors are skipping the Philippines for Vietnam, which ranks second just behind Singapore in science, mathematics, and reading. Today’s computer-controlled machines require more than muscles and a grade school education.   

The country’s ambition to reach middle-income status is threatened by the poor quality of its human capital.  Because of its relatively young population, the country can reap the so-called “demographic dividend,” or economic growth powered by a low dependency ratio and an expanding workforce. However, that opportunity may be an affliction if our young, uneducated workforce cannot find good jobs. Bereft of upward social mobility, they may become criminals or sociopaths. Inequality will soar, and social tensions increase.

However, populism, statism, protectionism, and leftism continue to animate discussions on equalizing reforms and reducing inequality: more social welfare payments and higher protection for farmers, higher minimum wages and more holidays for workers, more land to the landless, import quotas and restrictive land conversions to protect farmers, and more money for the education bureaucracy. These ideas have not lifted people out of poverty. 

How can education in the country be improved? We must move away from the principles of leftism, economic nationalism, protectionism, statism, and asset reform enshrined in the 1987 Constitution. Agricultural protectionism, for example, has led to high food prices and severe nutritional deficiency among our youth. Malnutrition in the first 1,000 days of babies’ lives impairs their ability to learn later in life. High corn prices mean high chicken and pork prices, translating to protein deficiency, especially among adolescents. No wonder the average height of Filipino women is shrinking. (Nababansot, in the vernacular.)

Asset reform has led to land fragmentation, low productivity, and high food prices. Reversing land fragmentation through farm consolidation and increasing land retention limits is the first step in reforming Philippine education.

The statism enshrined in the Constitution has led to a boondoggle of an education bureaucracy. According to educator and management expert Dr. Victor Limlingan, the Education department has one million employees on its payroll and 12 levels of administrative bureaucracy between the Secretary of Education and the classroom teacher.  It’s too bureaucratic. Dr. Limlingan suggests a phased and planned devolution of primary and secondary education to Local Government Units and local school districts. 

Furthermore, since the government is inefficient and incapable of providing quality education, it should consider expanding school vouchers to the primary and junior high school levels. Studies have shown that students who graduate from private schools score at par with those from countries with similar levels of GDP per capita. In other words, the performance of public-school students is pulling down the Philippine average.  Private schools produce better graduates and are far more efficient than public schools.  Therefore, the government should expand the school voucher system.

Other issues must also be addressed, including curriculum reform (too much time for sibika and insufficient learning time mastering the basics of reading and math), insufficient qualified math and science teachers, and the system of mass promotion.

To sum up, as a society, we must start focusing on education as the equalizing reform and bury the ideas of asset reform, “land to the landless,” protectionism, and ayuda as social justice. Otherwise, we can’t sustain economic growth and will just redistribute poverty.

 

Calixto V. Chikiamco is a member of the board of IDEA (Institute for Development and Econometric Analysis).

totivchiki@yahoo.com