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Raslag’s Pampanga project targets to power 24,000 homes

RASLAG Corp. has activated its 36.646-megawatt-peak solar power plant in the municipality of Magalang in Pampanga, the renewable energy company said on Thursday.

The Pampanga solar power project, the company’s fourth and largest solar facility to come online, is expected to produce 53 gigawatt-hours of electricity and power 24,000 homes annually.

Raslag is also expecting P285 million in revenues in its first year of operations.

The project has started testing and commissioning to connect to the 69-kilovolt transmission line of the National Grid Corp. of the Philippines.

“We are thrilled to have already completed four organic projects to help meet our nation’s growing energy demand. The RASLAG-4 project marks another step towards putting power back into the hands of Filipinos,” Raslag President and Chief Executive Officer Robert B. Nepomuceno said in a statement.

With the latest project, Raslag’s total installed capacity increased to 77.844 megawatts (MW) in two years of being a publicly listed company.

The company is aiming to increase its renewable energy portfolio to at least 1,000 MW by 2035, with three more projects already underway.

Its next solar project will rise in Sta. Rosa, Nueva Ecija, and is targeted to come online by 2026.

In January, Raslag announced its plan to purchase land parcels with an estimated aggregate area of over one million square meters in the province for around P807.73 million. The sites will house Raslag 7 and Raslag 8 solar projects.

The company develops, owns, and operates solar power plants to provide utility-scale renewable energy to grid customers.

At the local bourse on Thursday, shares in the company increased by 3.81% to close at P1.09. — Sheldeen Joy Talavera

Robinsons Hotels to invest P10B in hotel dev’t

ROBINSONSHOTELS.COM

THE P10-billion investment will add more than 990 room keys to the portfolio of Robinsons Hotels and Resorts, RLC said in a statement to the stock exchange on Thursday.

The investment includes the launch of the ultra-luxury NUSTAR Hotel in Cebu, the lifestyle brand Grand Summit Hotel in Cebu and Pangasinan, and the first and only Filipino-owned five-star hotel brand Fili in Bridgetowne Estate in Quezon City.

“These developments will not only solidify Robinsons Hotels and Resorts’ position as a leader in the hospitality sector but also elevate its standing among globally recognized brands catering to a wide range of market segments,” RLC said.

“The P10-billion investment is poised to drive long-term growth, enhance guest experiences, and position Robinsons Hotels and Resorts as a key player in the country’s thriving tourism and real estate sectors,” it added.

RHR claims to be the largest and most diversified hotel group in the country with 30 properties in 20 cities and municipalities nationwide. It has nearly 5,000 room keys, according to the company’s website.

RHR’s other properties are The Westin Manila, Crowne Plaza Manila Galleria, Dusit Thani Mactan Cebu, and Holiday Inn Manila Galleria.

On Thursday, RLC shares rose 0.38% or six centavos to P15.66 per share. — Revin Mikhael D. Ochave

Tribu takes on timeless tunes

CULTURAL GROUP Tribu will be transporting audiences to the romantic canals of Venice and serenading them with classical opera arias, Broadway melodies, and Disney tunes.

The showcase on Oct. 26 will take place at Teatrino, The Promenade in the Greenhills Shopping Center, San Juan City.

Presented by Ephesus Teatron Group, the concert will see group members Sweet Samaniego-Buchanan, Margarita Roco, Terence Guillermo, Nazer Salcedo, and Onyl Torres put on a family friendly extravaganza.

“We want the show to provide entertainment and musical education that will resonate with audience members of all ages,” said Ms. Samaniego-Buchanan, who is also the musical director, at a press conference on Oct. 1.

Performing alongside the five classically trained singers will be special guest Nicole Laurel-Asensio, known for her modern takes on classic music genres. The show is arranged by Pipo Cifra.

Tribu traces its roots to the Aliw Award-winning cultural group Tribung Pinoy from the 1980s, led by the late Danny Dolor, an ardent advocate of Filipino culture. Ms. Samaniego-Buchanan, a University of Santo Tomas Conservatory of Music-trained coloratura soprano, had the opportunity to sing with this iteration of the group, with her mentor Gloria Dizon Coronel.

In 2011, Mr. Dolor received an invitation from the Cultural Center of the Philippines to mount a concert titled Harana sa Dapit Hapon. Because reuniting the pioneers of Tribung Pinoy proved to be a challenge, Ms. Samaniego-Buchanan instead continued its legacy by forming the five-piece vocal ensemble that Tribu is today.

The repertoire for the upcoming concert will consist of “specially arranged immortal Filipino songs ranging from timeless kundiman, beloved folk songs, captivating zarzuelas, and stirring patriotic anthems, to well-loved Original Pilipino Music,” she said.

Speaking with BusinessWorld, she added: “The repertoire is what it is because of the varied range of talents and interests the five of us have. What happens is we naturally list songs we want to sing while together.”

Compared to their concert last year, titled Klasical at the now-closed Onstage theater at Greenbelt, Makati, the upcoming edition will have more medleys of Disney tunes (think “Bibbidi-Bobbidi-Boo” from Cinderella) and popular musicals like Les Miserables. Their repertoire of opera arias and kundimans will make up a huge part of the show.

“For an arranger like me, it’s a joy to work with such experienced and professional singers such as the five of them. It makes my job much, much easier, knowing the wide range that they can pull off individually and as a group,” Mr. Cifra told BusinessWorld.

During the pandemic, Tribu held several online shows — still available on YouTube — ensuring that they continued to hone their craft.

In 2023, the group released its first album, Klasical Tribu: A Collection of Immortal Filipino Folk Songs. Their activities over the years earned them the accolades Best Cultural Group at the 2023 Aliw Awards and Outstanding Vocal Ensemble at the 2023 Live Entertainment, Arts, and Festival (LEAF) Awards.

Aside from performing with Tribu, the five members are music educators in various Philippine schools and universities. When asked what their goal is for the future, they all responded with a resounding dedication to “help grow music education in the Philippines.”

“That’s why we make our shows fun, engaging, and very informative, with the narrator role giving insight to everything we perform,” said Ms. Samaniego-Buchanan. “Filipinos love music, and Tribu aims to give everyone the opportunity to learn about different kinds of it.” — Brontë H. Lacsamana

Aboitiz group taps Irish firm for Laguindingan airport

ABOITIZ InfraCapital, Inc. is partnering with Ireland-based daa International for the upgrade and operations of the Laguindingan International Airport in Misamis Oriental.

“Aboitiz InfraCapital will partner with daa International who will assist and lend its expertise in airport operations as technical services advisor,” the company said in an e-mail on Thursday.

The infrastructure arm of the Aboitiz group has secured the contract to upgrade, operate, and maintain the Laguindingan Airport in Northern Mindanao.

The Department of Transportation said Aboitiz InfraCapital is set to sign the concession agreement for Laguindingan within this month, while it is set to take over the operations and maintenance of the airport by April next year.

“We are excited to take on revitalizing Laguindingan airport and collaborating with stakeholders to create a world-class facility that serves travelers and the community alike,” Aboitiz InfraCapital President and Chief Executive Officer Cosette V. Canilao told the stock exchange on Thursday.

According to the company, the proposed P12.75-billion Laguindingan airport project includes the development, renovation, and expansion of existing facilities.

The company said it intends to fund the budget for the airport upgrade and operations through a mix of debt and equity.

“This will cover the airport’s passenger terminal building, required equipment installation, and airside and landside facility enhancement and development for a 30-year concession period,” it said.

daa International is an Irish airport operations management subsidiary of Ireland’s Dublin Airport Authority.

According to its website, it offers airport operational management services through major global airports like Dublin International Airport, Red Sea International Airport, and King Khalid International Airport in Saudi Arabia.

“Building on our experience at the award-winning Mactan Cebu International Airport, we are excited to bring our home-grown Filipino brand of airport operations to Misamis Oriental,” said Aboitiz InfraCapital Vice-President for Airport Business Rafael M. Aboitiz.

Aboitiz InfraCapital GMR-Megawide Cebu Airport Corporation manages the Mactan-Cebu International Airport. 

The company has also submitted unsolicited proposals for the operations, maintenance, and development of the New Bohol-Panglao International Airport, Bicol International Airport, and Iloilo International Airport.

The group secured original proponent status for the New Bohol-Panglao International Airport, which will undergo the Swiss challenge by November. — Ashley Erika O. Jose

Megalomania

NATHALIE EMMANUEL and Adam Driver in a scene from Megalopolis.

Movie Review
Megalopolis
Directed by Francis Ford Coppola
MTRCB Rating: R-16

CAME OUT of Megalopolis feeling a lot of things but what I did not feel was disappointed — not a bad thing but not necessarily a good thing either.

I run hot and cold on Francis Ford Coppola. Thought his first two Godfather films were classically well-written if visually conventional, too-carefully curated portraits of a corrupt  American family, thought Apocalypse Now was a vividly directed Vietnam war movie that had little to do with the actual war, thought The Conversation (easily his best early work) was a nicely done portrait of loneliness and introverted paranoia.

I actually prefer Coppola’s wilder, less disciplined later works: the lowkey monochromatic Rumble Fish, the emotionally extravagant One From the Heart (my favorite), the beautifully mounted Bram Stoker’s Dracula (despite Keanu Reeves as an allegedly British real estate agent, and a haphazardly grafted love story), and now this, his wildest most undisciplined yet, basically a retelling of the Catilinarian conspiracy transposed to modern-day New York.

Call the picture a prequel to Fritz Lang’s Metropolis, only instead of telling how the city heaved in conflict and was nearly brought to ruin, Coppola tells of how the city was constructed despite all odds.

The setting is America, only an alternate America where Rome didn’t fall, and the nation’s greatest city New York is instead called New Rome (maybe the most unsettling element in this parallel world is the total lack of an Asian presence — no Filipino faces, no Indian saris, no Chinese calligraphy on storefronts or billboards, no sushi or izakaya or Korean BBQ shops, it’s as if half the planet had ceased to exist).

Two men face each other in opposition: architect/inventor Cesar Catilina (Adam Driver) and mayor Franklyn Cicero (Giancarlo Esposito). Catilina wants to build Megalopolis, a city within the city; Cicero opposes Catilina because… well it isn’t clear why. We’re supposed to assume Cicero, being one of the city’s powers, is threatened by Catilina’s rising trajectory, and feels he must bring the younger man down; their conflict reads as Coppola’s parable on an iconoclast threatening the studio-established status quo, the city itself a metaphor for this passion project the said iconoclast took over 40 years to make.

Cicero is readily countered though — he happens to have a daughter Julia (Nathalie Emmanuel) who takes it upon herself to investigate Catilina, his private life, and the possibility that he murdered his wife. Julia draws closer to Cesar, and… well you can guess the rest.

The conflict represents only half the dramatic fireworks: in the B plot Cesar’s mistress Wow Platinum (Aubrey Plaza) leaves Cesar to marry Hamilton Crassus (Jon Voight), Cesar’s uncle and banker, then schemes to keep her former lover under her thumb.

On top of startling effects both practical and digital, the intricate set design, the various cameras and lighting equipment put to innovative use, there’s the acting which, to put it charitably, is highly stylized — a caricaturish, even cartoonish, version of the kind of larger-than-life performance you see in opera, probably cultivated through Coppola’s acting exercises and constant improvisation. Results can be bizarre — Shia Lebouf as Clodio (Cesar’s jealous cousin) was reportedly a nightmare to deal with and some of his unpredictably is caught onscreen. Of the cast Driver, Emmanuel, and Esposito are allowed to retain their dignity (to their relief I’m guessing), while Aubrey Plaza as Platinum seems able to internalize all that stylization and produce her own aura of comically sensual menace — think an unholy cross between Ida Lupino from They Drive by Night and Linda Fiorentino from The Last Seduction only funnier, the single best piece of evidence on film that Coppola might be on to something here, acting-wise.

Megalopolis is to be constructed out of Megalon, a “bio-adaptive” material invented by Cesar apparently out of his grief and passion for his dead wife. Not only is it capable of creating unusually organic structures, it enables Cesar to stop, rewind, fast-forward time; cause objects to rise in the air; heal bullet wounds; receive light on one side and transmit it on its other (essentially allowing any tunic made of the material to become invisible). Megalon is in effect Coppola’s mega-macguffin, a plot device to turn Cesar into the film’s Prospero, taking to the stage in his final appearance in Coppola’s (sorry, Shakespeare’s) final play.

Maybe my biggest problem with the film (other than the “stylized” acting) is how vague this all is — “Megalon” being the biggest sin, up there with James Cameron’s “Unobtanium.” Is the material psychoactive? Is it manufactured or grown? What goes into its production? How can it be employed? The finished city is only partly visible, obscured by the fact that the material glows like a mass of optic fibers, or Hollywood’s notion of the human spirit lighting it up from within (Coppola reportedly looked at the designs of Neri Oxman, who has a cameo in the film and who fabricates what might be called biologically inspired material — looking at pictures of her exhibits and the constructs on display, they have a fascinating solidity and complexity of texture the filmmaker’s “buildings” never manage to achieve). Half the surreal images in this film can apparently be explained by Megalon, which takes away from surrealism’s magic (a trick loses power when explained), at the same time it leaves the more rational with too many unanswered questions. Questions that, when you think about it, can easily remain unanswered if they had been asked in an early scene then dismissed, preferably with a comic quip.

Comic dialogue or at least witty dialogue can cover or make up for a lot of sins, at least they do me, but Coppola and his cast are apparently too busy trying to come up with some kind of observational truth to bother. The only one who seems able to produce on the fly is Plaza — and it may be because she bats her huge eyes, flashes that wicked grin, and you’re dazzled into believing she’s being witty, or at least funny; her seduction of LeBouf might be a balletic comic classic.

(Skip this paragraph if you plan to see the film!)

On a more serious note, Coppola inserts shots of the homeless and hungry assembled in front of security barriers, shaking the fence links. Cesar never really gives them more than a glance; if anything, Clodio pays them more attention, if only because he believes them to be a source of power (they are, but at one’s peril). I can understand inserting the footage — Coppola wants to raise the dramatic stakes — but how does Cesar actually feel about these folk? He declares Megalopolis open to all, but how’s that supposed to work? Are millions supposed to just walk in and claim a building? What if someone pisses on a wall or picks up a tire iron and starts smashing? What if two people want the same dwelling? Details of how this new utopia will work, the philosophy underpinning it and why it’s so different might have helped, and I’m aware said philosophy might have already been stated and I might have missed it along the way. Like I said: vague.

The film’s pace is a slog for the most part; what helps sustain interest is Coppola’s visual style, and his vision of transforming New York — sorry, New Rome — sorry, the film — into Cesar’s — sorry Coppola’s — dream city — sorry, dream movie. The style works best when Coppola’s working with actual buildings, footage of which was shot years back on high-definition video and 24 fps digital cameras, later with sets and period exteriors made to look like New York (actually, various locations in Georgia, which offered tax incentives). He manages to make this mix of old footage, interior shots, and shots made to look like exteriors recall the scale and grandeur and variety of Lang’s Metropolis, which is quite an achievement (it helps that Metropolis itself was saddled with a sentimental half-baked script and God’s own arsenal of outsized models and fascinating practical effects).

Pause to note that Coppola does pay tribute to Abel Gance’s Napoleon (which he helped restore) with his occasional triptych imagery, and in one lovely moment evokes a scene out of Night of the Hunter, of Shelly Winters silently sitting in a drowned car, her hair waving languidly in the undercurrent — just some of the Easter eggs Coppola includes that I managed to recognize and recall, and they (the Laughton one anyway) are unforgettable.

Megalon isn’t the only element that affects the passage of time: when Adams and Emmanuel and Esposito are onscreen and we’re asked to believe in their romance and his opposition time passes slowly (I do eventually believe but it took effort, and a nod to Esposito for giving Cicero the necessary emotional weight — when his feelings start to shift it’s like watching a great battle cruiser changing course — and Emmanuel for making such a contradictory character, if not convincing at least intriguing, a mixture of the innocent and the knowing in a fragile suspension); when Plaza and LeBouf and Voight are onscreen the film kicks into high gear and purrs away in a manner that helps us accept the onscreen shenanigans as just part of the comedy (if Coppola had recast this as black satire the whole might go down easier).

But it is what it is, and Coppola apparently is sticking by this, his released version, opting for delirious romanticism over madcap chaos — which wouldn’t be the first time a longtime director’s late work has proven controversial or at least puzzling: Alejandro Inarritu’s Bardo: False Chronicle of a Handful of Hard Truths runs almost three hours and is even less comprehensible (I liked it); David Lynch’s Twin Peaks: The Return is essentially an 18 hour movie with an even more opaque plot and visual style (loved it). Coppola’s generation of ’70s American filmmakers are feeling their age and thinking of the legacy they’ll leave behind — I mentioned Lynch but there’s also Spielberg with his autobiographical The Fabelmans (liked it just fine), Scorsese with his long-gestating Silence (27 years — loved), Schrader with one small film after another, some of them career bests (Master Gardener, The Card Counter, above all First Reformed).

Brian De Palma has been quiet for some five years, though a search reveals he has two projects under development; Philip Kaufman hasn’t been heard from for maybe 12 years. Charles Burnett hasn’t done a fiction theatrical feature since the 1990s but has been surprisingly active, doing shorts and documentaries and TV work, and has two under development. Elaine May… she was inactive as a director for 26 years till she came up with an episode of American Masters for PBS focused on Mike Nichols (a brilliantly ambiguous work).

And so matters stand unless Coppola (as he’s been known to do in the past) starts tinkering with this “final product,” adding deleted scenes and fiddling with the running time — who knows? Someday we might get a Megalopolis we can actually like without getting a hernia from the effort.

IMF bullish on PHL banking sector

BW FILE PHOTO

THE PHILIPPINE BANKING sector remains strong, the International Monetary Fund (IMF) said, but noted potential risks that need monitoring such as quickening loan growth and vulnerabilities in the real estate sector.

“Our view is that the Philippine banking sector is strong. It has strong capital, liquidity buffers and high profitability,” IMF Mission Chief Elif Arbatli Saxegaard said at a press briefing on Wednesday.

“Of course, there are always some pockets of vulnerabilities that we would advise the (central bank) to be vigilant about,” she added, noting that systemic risks within the financial system remain moderate.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the combined net income of the country’s banking industry rose by 4.08% to P190.21 billion as of end-June, while total resources of the Philippine financial system jumped by 10.5% to P32.1 trillion at the end of July.

“Of course, another factor in terms of bank profitability will be interest margins and what happens to them as interest rates are reduced. And that really will depend on how the reductions will be passed on to deposit and lending rates,” Ms. Saxegaard added.

BSP Governor Eli M. Remolona, Jr. has signaled possibly cutting rates by 50 basis points (bps) in the fourth quarter. The Monetary Board’s remaining meetings this year are on Oct. 16 and Dec. 19.

The recent cut in banks’ reserve requirement ratios (RRR) will also support bank profitability and, eventually, credit growth, Ms. Saxegaard said, as lenders will have more liquidity. The BSP last month said it will cut big banks’ RRR to 7% from 9.5% effective on Oct. 25.

“Having said that, continued vigilance is warranted against pockets of vulnerability in the real estate sector and the fast-growing consumer credit market,” she said.

“Adjusting macroprudential policy as credit picks up, including by moving towards a positive neutral level for the countercyclical capital buffer, will help preempt the buildup of vulnerabilities.”

For the property sector, there are some segments of the commercial real estate market where vacancy rates remain high, Ms. Saxegaard said.

“As you know, the real estate sector went through a big shift during the pandemic with the departure of the Philippine Offshore Gaming Operators (POGOs), and there are changes in the business outsourcing sector, [with the] work-from-home practices,” she said.

The IMF official added that the BSP must ensure “a strong pickup in credit remains healthy and is going to the healthy borrowers.”

“This is really to point out that the consumer credit market is coming from a low base, but it’s increasing very fast. It’s not a case where we see a huge vulnerability there, but we would like to be vigilant about the fast growth in that segment,” Ms. Saxegaard said.

“Right now, credit growth is more or less comparable to its pre-pandemic averages. So, you know, we don’t anticipate a huge pickup above those levels, but we do expect to see robust growth in credit, a healthy growth in credit.”

Bank lending rose by 10.4% year on year to P12.14 trillion in July, its fastest pace in 19 months, latest data from the central bank showed.

Meanwhile, the IMF said Philippine banks’ non-performing loans (NPL) remain manageable.

“That’s also what we’ve heard from the regulator and also from the banks. They’re currently at about 3.5%, so they do remain manageable,” IMF Representative to the Philippines Ragnar Gudmundsson said at the same briefing.

“There are segments where we see higher NPLs. For instance, the residential real estate market, the NPL level there is still above the pre-pandemic level at 7%, which is precisely one of the reasons why we’re saying that effective supervision and monitoring is important to address some potential vulnerabilities there,” Mr. Gudmundsson added.

Latest central bank data showed the banking industry’s gross NPL ratio went up to 3.58% in July from 3.51% in June and 3.43% a year ago. This was the highest bad loan ratio in 25 months or since 3.6% in June 2022.

‘GRAY LIST’
Meanwhile, the IMF also noted the country’s progress in its bid to exit the Financial Action Task Force’s (FATF) “gray list” of jurisdictions under increased monitoring for anti-money laundering risks.

The FATF in its June update kept the Philippines in its gray list for a third straight year or since June 2021.

“We would also like to note that important progress has been made in addressing anti-money laundering and combating the financing of terrorism (AML/CFT) issues, and the current momentum should be maintained to close the outstanding gaps in the AML/CFT framework and achieve prompt removal from the FATF gray list,” Ms. Saxegaard said.

Mr. Remolona earlier said the Philippines would likely exit the gray list by next year as it still needs to address remaining deficiencies identified by the FATF.

The country has acted on 15 out of 18 items recommended by the FATF. The remaining three action items include “demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets; applying cross-border measures to all main sea/airports including detection of false declarations of currency and confiscation action in line with risk; and demonstrating an increase in the prosecution of TF (terrorism financing) cases in line with risk.”

The FATF Plenary, the intergovernmental organization’s decision-making body, usually meets in February, June and October. — Luisa Maria Jacinta C. Jocson

NAIA operator to start collecting curbside fees

PHILIPPINE STAR/AJ BOLANDO

By Ashley Erika O. Jose, Reporter

THE SAN MIGUEL-LED operator of the country’s main gateway expects to start collecting fees this year from vehicles in drop-off or pickup zones beyond the time limit.

“Curbside fees are normal. Other airports have them. There’s a group working on that,” New NAIA Infrastructure Corp. (NNIC) General-Manager Angelito A. Alvarez told reporters on the sidelines of the European Chamber of Commerce of the Philippines Aviation Summit 2024 on Thursday.

He said all fees under the administrative order issued by the Manila International Airport Authority (MIAA) are for implementation this month, with the exception of the passenger service charge, which will be imposed in September next year.

The NNIC is composed of San Miguel Corp. (SMC), one of the Philippines’ largest and most diversified conglomerates; RMM Asian Logistics, Inc.; RLW Aviation Development, Inc.; and Incheon International Airport Corp., the operator of South Korea’s main international airport.

The group took over the operations and maintenance of NAIA on Sept. 14 after offering to allocate 82.1% of NAIA revenues to the government.

“The [readjustment of rates] is actually beyond us because the terms of reference have been set by the government. We have no choice but to comply. But maybe we can study it further,” Mr. Alvarez said.

Under MIAA’s Revised Administrative Order No. 1, landing and take-off fees for international and domestic air traffic movement will be higher effective Oct. 1.

Landing and take-off fees are charges levied for the use of airport facilities and services during aircraft landings and takeoffs.

Local airlines said the imposition of higher landing and take-off charges may result in higher airfares.

“Cebu Pacific confirms that increases in landing and takeoff fees at NAIA will impact both airlines and passengers,” Cebu Pacific said in a statement.

“These adjustments, covering fees, dues, charges, and assessments, are expected to influence ticket pricing. However, AirAsia Philippines is still carefully evaluating the potential operational impact of the new airport fees,” Steve F. Dailisan, head of communications and public affairs at AirAsia Philippines, said in a Viber message.

Philippine Airlines did not respond to BusinessWorld’s request for comment by the deadline.

“Already, travelers are hit with excessive airport fees, inflated parking rates, and steep landing and take-off charges — fees that are being imposed long before the airport upgrades have even been completed or their benefits realized,” AirportWatch spokesperson Danilo Lorenzo Delos Reyes said in a statement.

NNIC also defended the hike in parking fees at the airport, saying that it is part of its overall plan to help improve airport flow.

The previous parking fees unintentionally invited the misuse of the airport’s limited parking spaces, NNIC said, adding that this created a parking shortage for passengers, which resulted in congestion.

In an administrative order effective Oct. 1, NNIC said the standard parking fees for cars will increase by 25% to P50 from P40 for the first two hours, while it will also impose a P25 charge for succeeding hours or a fraction thereof.

Standard overnight parking fees for cars will increase fourfold to P1,200 from the previous P300, according to NNIC.

For motorcycles, NNIC said it will impose P480 parking fees for a 24-hour stay and P2,400 for buses.

Further, Mr. Alvarez said that the company may study the call to exempt airport workers from the parking fee increase.

“We can review this, but as far as we are concerned, based on the study, the rates imposed are reasonable,” he said.

InstaPay, PESONet transactions rise to P10.9 trillion

THE VALUE of transactions done through InstaPay and PESONet rose to P10.9 trillion in the first eight months of 2024, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Central bank data showed that transactions coursed through the two automated clearing houses climbed by 34.1% as of August from P8.13 trillion in the same period a year ago.

In terms of volume, transactions done via InstaPay and PESONet also surged by 64.5% year on year to 916.58 million from 557.25 million.

Broken down, the value of transactions done through PESONet jumped by 27.1% to P6.37 trillion in the eight months ended August from P5.01 trillion in the comparable year-ago period.

The volume of PESONet transactions likewise rose by 9% to 65.56 million from 60.16 million.

Meanwhile, the value of InstaPay transactions stood at P4.52 trillion in the January-August period. This was 44.9% higher than the P3.12 trillion recorded a year prior.

The volume of transactions that went through the payment gateway soared by 71.2% to 851.03 million in the period from 497.09 million the previous year.

PESONet and InstaPay are automated clearing houses launched in December 2015 under the central bank’s National Retail Payment System framework.

PESONet caters to high-value transactions and may be considered as an electronic alternative to paper-based checks.

Meanwhile, InstaPay is a real-time, low-value electronic fund transfer facility for transactions up to P50,000 and is mostly used for remittances and e-commerce.

Digital payments made up 52.8% of the volume of retail transactions in 2023, latest BSP data showed, up from the 42.1% share in 2022.

In terms of value, 55.3% of retail transactions last year were done online, also rising from 40.1% the year prior.

The BSP wanted at least 50% of the volume and value of retail transactions done online by end-2023 under its Digital Payments Transformation Roadmap.

The increase in digital payments was driven by wider use of online transaction channels among individuals and businesses, the central bank said, with the coronavirus pandemic accelerating this shift.

The central bank wants online payments to make up 60-70% of the country’s total retail transaction volume by 2028, in line with the Philippine Development Plan. — Luisa Maria Jacinta C. Jocson

Managing dark clouds in the Philippines

FREEPIK

One key assumption of the Philippine Government’s growth and inflation targets for this year and the next is a relatively manageable global economy. Growth targets of 6-7% in 2024 and 6.5-7.5% for 2025, as well as the inflation target of 2-4% for both years must be anchored on our major trading partners growing at less than 2%, based on the IMF’s latest forecasts.

Overall, the world economy is expected to modestly expand by just slightly over 3% for both 2024 and 2025. By historical standards, this prognosis is low, the weakest in fact in decades.

This was admitted by IMF Managing Director Kristalina Georgieva during the United Nations’ Summit of the Future in New York on Sept. 22. While arguing that the world economy “has proven to be remarkably resilient to the multiple shocks of the last years,” Ms. Georgieva also clarified that growth forecasts are a percentage point lower than in the decades prior to the pandemic. Sluggish growth prospects are most pronounced for low-income countries which have to struggle at a below-pandemic path. Unfortunately, they could be victims of a low growth, high debt trap — something that we experienced in the 1980s.

What is more concerning about the global economy is that the risks sound so close and real, including the high cost of money, fiscal consolidation, the longer-term effects of the pandemic, and the raging war between Israel and its neighbors. Downside risks could be weak productivity across borders and sustained geo-economic fragmentation. Big countries are moving back to their home economies, or to economies friendly to them, to do manufacturing or business processes for them.

These are dark clouds over the global economy.

One plank of global growth, and big risk, of course is China, the second biggest economy with a GDP of around $18.5 trillion, to the United States’ $29 trillion. Although the Fund looks at this year’s risks to be balanced, those in China are clearly on the downside. The Fund was rather emphatic in pointing out that “without a comprehensive response to the troubled property sector, growth could falter, hurting trading partners.” Trading partners include the big economies and emerging markets alike, including the Philippines.

In his interesting report of Oct. 2 in GlobalSource Partners, Andrew Collier cited what Bloomberg called a “massive adrenaline shot” announced by the People’s Bank of China (PBoC). Likened to a bazooka, the package was anything but modest:

• a cut in the seven-day reverse repurchase rate to 1.5% from 1.7%;

• a reduction in the required reserve ratio, freeing up an estimated 1 trillion yuan in bank lending;

• an order by the central bank to commercial banks to lower mortgage rates by at least 30 basis points below the loan prime rate before Oct. 31;

• a new rule allowing home buyers to refinance mortgage loans;

• promises of more fiscal stimulus in an unusual shift away from monetary policy; and,

• Ministry of Finance (MoF) bonds issuance for consumption and local debt resolution.

The sudden announcements by both the PBoC and the central government, GlobalSource wrote, suggested increased nervousness about the state of the Chinese economy. GlobalSource held the view that Beijing’s economy could indeed be under heavy stress. Three reasons were cited by GlobalSource:

First, the expected shift from monetary to fiscal policy could be problematic. Easy monetary policy does not exactly filter down to the entire banking system. Banks are dominated by state banks which usually lend to state enterprises in the industrial sector. Monetary policy therefore is fiscal policy “in disguise” and so far, it has not worked.

Second, China’s fiscal space is limited. It does not have sufficient revenues to fund a more sizeable, more significant fiscal stimulus. Large central bank debt will be augmented by massive bond issuance. Xi Jinping in particular is skeptical about housing providing economic benefits to the future of China. GlobalSource does not buy the possibility of a large-scale change in the Chinese Communist Party’s mind set. It could be a simple attempt to perk up sentiment through policy pronouncements. So far, there has been little follow-through and little result.

And third, even the promised huge new support to the economy might not prove enough. Although bank loans for property acquisition could be large following the stimulus from lower interest rates, this will not happen unless consumer sentiment turns more optimistic. Bank loans data does not show this. True, the stock of loans in RMB grew by nearly 9% for the first seven months of 2024 versus the year-ago level. But new loans for households dropped by more than 71% and nearly 38% for both private enterprises and public institutions. With nominal support of the property sector, GlobalSource believes that “Beijing is leaving the property collapse in the hands of local governments.”

As if China’s wobbly prospects are not enough to depress market sentiment and future growth, Fitch Ratings projected US consumption growth to begin slowing down over the next 12 months. By 2025, US consumption is expected to decelerate to 1.4% from 2.2% this year. “A notably sharper slowdown could have big implications for emerging market sovereigns, though we view this risk as low,” Fitch declared. But as reported in the broadsheets, this dark prognosis is supported by a Reuters report that the decline in US consumption in September was the biggest in three years. In addition, the Conference Board also reported that the consumer confidence index in September dropped the furthest since August 2021.

Fitch explained that the Philippines “is among the countries that could experience spillover effects from the anticipated weakness.” As a consequence, Philippine exports are likely to be hit. Remittances from overseas workers could also be trimmed.

Growth momentum could lose a few basis points.

This is our main takeaway from the recent Article IV consultation with the IMF mission a couple of days ago. Mission Chief Elif Arbatli Saxegaard stressed that risks to the growth outlook are tilted to the downside, thanks to the anticipated slowdown in major economies — no doubt including the US and China — commodity price volatility, supply shocks and geo-political tensions.

With the expected weakening of private consumption, despite the easing of monetary policy and the stabilization of inflation to within target, the Fund decided to trim the country’s growth forecasts from 6% to 5.8% this year and from 6.2% to 6.1% in 2025, both below the official growth targets of 6-7% this year and 6.5-7.5% in 2025.

Fitch’s BMI recently commented that “the BSP’s decision to lower interest rates ahead of the Fed is a sign that policy makers are starting to grow increasingly concerned about the economy’s health.”

The Fund recognized that non-monetary measures have been continuously undertaken by the authorities to reduce food prices and they would certainly contribute to supporting private consumption. Higher private investments, both local and foreign, could also help stimulate economic growth. There is a great potential from the country’s natural resources, blue economy, and demographic advantage.

But such potentials have to be unlocked “through comprehensive and well-sequenced structural reforms.” What is fundamental in this structural approach is good governance, and a word of advice coming from the Fund could have been a good way for the political leadership to keep its feet on the ground. While the Fund was commending the Philippines that its growth projections remain one of the highest in the region, it could have delivered a more sobering piece of advice, that high growth is not enough. It has to be quality growth, it has to be durable over the long run, one that would not perpetuate jobless growth.

If the National Government’s debt level is now inching beyond 60% of GDP, it might be difficult to expect that more and more resources could be earmarked for cheap and reliable energy, stronger connectivity from Luzon to Visayas and Mindanao, and for funding investment in human capital. The authorities ought to start thinking of breaking the old mold of doing the budget, spending it, and monitoring how it was spent within the context of transparency and accountability.

Dark clouds affect everyone on this planet, but if our domestic economy is fortified, we could by all means manage them. We struggle but we survive.

 

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

Cignal TV to air Chinese by Blood, Filipino by Heart

CIGNAL TV, Inc. has partnered with CHiNOY TV to air a lifestyle magazine show featuring Chinese-Filipino celebrities, businessmen, and public figures.

CHiNOY TV’s 30-minute program, Chinese by Blood, Filipino by Heart, celebrates both Filipino and Chinese cultures, and the success stories of Chinoys in the Philippines.

“We’re very happy to have CHiNOY TV on OneNews Channel. We think it’s a very strong addition to our line-up of programs on One News,” Patrick Y. Paez, AVP – head of News Channels & Content Management at Cignal TV, Inc. said during the event held in TV5 Media Center.

The eight-episode program, now in its fifth season, is available for Cignal TV viewers on Channel 8 (SD) and 250 (HD) and will air every Sunday at 8 p.m. with replays on Saturdays at 8:30 p.m.

“We are excited to join forces with Cignal TV. This partnership will allow us to reach a much wider audience and share our stories with more Filipino viewers,” Henry Tan, chairman of CHiNOY TV said.

Among the guests on the show are Z Teo, doctor of Aesthetic Medicine, and owner of The Aivee Clinic, and vlogger Benedict Cua.

CHiNOY TV is a multimedia company that has been telling stories about the Filipino-Chinese community and its culture since 2010.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest, has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Aubrey Rose A. Inosante

Pinterest ad solutions now in PHL via Singapore’s MediaDonuts by Aleph

MEDIADONUTS by Aleph, a digital marketing performance and branding solutions company based in Singapore, has partnered with Pinterest, a visual discovery and social media platform headquartered in the United States, to bring the platform’s advertising solutions to the Philippines and other Asian markets.

The  sales partnership will expand Pinterest’s digital advertising solutions to Singapore, Malaysia, Indonesia, Philippines, Thailand, Vietnam, and South Korea, MediaDonuts by Aleph said in a news release on Thursday.

“For the first time, brands in these markets will be able to reach millions of Pinterest users who come to the platform with a passion for discovering new ideas and the commercial intent to bring those ideas to life,” said Matt Hogle, vice-president of global small- and medium-sized business sales at Pinterest.

MediaDonuts by Aleph also said it is the newest member of the Aleph family of brands, including Httpool, IMS Internet Media Services, Wise.Blue, Social Snack, Ad Dynamo, and Connect Ads.

Aleph and Pinterest recently announced an expansion of their partnership across 11 new markets in Latin America, Asia, the Middle East, and Africa.

“The ability to advertise on Pinterest in these markets will unlock a great opportunity for brands and retailers to reach new customers,” said Pieter-Jan de Kroon, managing director at MediaDonuts by Aleph. — Aubrey Rose A. Inosante

Filipino capitalists, UNITE!

BW FILE PHOTO

NOTHING is more untrue than the claim of key economic departments that reductions in the budget deficit and the national debt are good for the economy. The Senate and Congress argue the same way, as well as the rating agencies and multilateral institutions. These claims reveal bad economics. Those who espouse such seemingly correct objectives do not appear to understand the operational reality of government finances, especially that running a fiscal deficit is not a sin, and the role of national debt for monetary policy. Our managers treat the economy like accountants in a firm or a family, where recurring expenditures above revenues is indeed a problem.

Unfortunately, the private sector has come to support such views because its members believe that lowering the fiscal deficit and national debt will benefit them. The reality is that both benefit the private sector.

This incorrect way of thinking derives from a series of fallacies that we address below. What follows is factual:

Fact 1: The government cannot run out of its own money because its finances are not like those of a family or a firm.

There is a generalized perception that a fiscal deficit is bad because of the negative connotation of the terms “deficit” and “debt,” together with the belief that the government’s finances are like those of a family or a firm. This is incorrect. While a family and a firm do have a budget constraint such that they cannot consume or spend forever beyond their income, sovereign governments can run deficits in their own currency because it is fiat money. This is government-issued currency that is not backed by a commodity.

This does not mean that governments should spend as if there is no tomorrow. It simply means that they are not bound by the family budget constraint. No country can run out of its own money to make payments. The government’s banker is the Central Bank, which creates money, the Peso in our case, ex nihilo. The fact is also that governments make payments by crediting bank accounts through electronic transfers. Governments can make as many such electronic transfers as they want to.

Wake up: governments do not spend with your taxes. Do you believe that developed countries build and pay for their vast highway systems, public schools, or hospitals with taxes? Although governments may have passed laws that impose accounting constraints about when and how to make payments, this does not change the fact that they use fiat money to make payments through electronic transfers, with or without taxes. Therefore, the statement “the government does not have money” is fallacious.

Fact 2: The government’s fiscal deficit creates a private sector surplus, peso for peso.

Government payments are recorded as a series of debits and credits in the accounts of the government itself, central bank, commercial banks, and households. A government payment ultimately shows up as a credit in someone’s account. Why would the private sector complain when the government transfers more to it (let’s say P100) than it pays to the government in taxes (let’s say P50)? Does anybody prefer the reverse situation? Taxes lower private sector income and thus, “your” consumption.

Fact 3: The term “national debt” is misleading because it only reflects one side of the double-entry accounting.

While Treasury Notes are debt from the government’s point of view, they represent wealth from the private sector’s point of view because its members own them. The Philippine sovereign government will never have problems servicing debt in its own currency. Treasury Notes are investments offered to the Filipino private sector in exchange for its liquid funds. The Notes offer interest and carry zero-default risk. Why complain about it? From the private sector’s side, it is manna from heaven. If national debt above a certain imaginary level (the famous 60%) was a real problem, some advanced economies would have already disappeared from the map.

From the Central Bank’s point of view, issuing debt is an interest management operation. A fiscal deficit (the difference of P50 in the above example) materializes as excess liquidity in the banking system: credits to the private sector (expenditure) are larger than debits (taxes). This pushes interest rates down. To maintain its target policy rate, the central bank will need to coordinate with the Treasury to mop up that excess liquidity by issuing debt. Some Treasury and Central Bank officials do not seem to realize that this is what they do.

Fact 4: Budget deficits do not crowd out private investment.

Often, the argument is made that government spending and private investment compete for a finite pool of savings, and this competition must be resolved with higher interest rates that damage private investment. Hence, fiscal deficits crowd out private investment. The crowding out argument is, however, without substance. First, it relies on the wrong claim that savings are finite, and borrowers like firms and the government have to compete with each other to gain access to that finite pool. Second, as pointed out above, fiscal deficits put downward, not upward, pressure on interest rates.

Fact 5: A fiscal deficit is part of the private sector’s aggregate profits, as reflected in the national accounts.

It is not difficult to show that Aggregate Corporate Profits = Entrepreneurs’ Consumption + Entrepreneurs’ Investment – Workers’ Savings + Trade Balance + Fiscal Balance. Workers’ savings are minimal in the Philippines. The last two terms, the trade balance and the fiscal balance, are positive with a surplus and a deficit, respectively. While this equation is true by definition, it is totally missed by the government and the private sector.

The equation indicates that total profits that owners of capital collectively receive are equal to the right-hand side of the equation. The relationship highlights the importance of the trade deficit and the government surplus: either of this (if positive) enables capitalists to earn profits in excess of their own expenditures and private investment.

In the case of a trade surplus, extra profits come from the excess of national income over domestic expenditure due to a surplus of export earnings over import spending. This implies that there is a rational basis for countries’ efforts to achieve and maintain trade surpluses as these tend to boost the profits of domestic firms (holding other factors constant).

A fiscal deficit is expansionary because it is equivalent to a private sector surplus with the government. Therefore, deficits provide an increased capacity for entrepreneurs to realize their production plans and sell output as they expand the total aggregate demand in the economy.

A fiscal surplus, on the other hand, leads to reduced profits. With a fiscal surplus, aggregate spending falls, which reduces the revenue that firms receive. Moreover, if the surplus is achieved with increased business tax rates, then the firms have lower after-tax profits. In most circumstances, a fiscal surplus is deflationary. While it may be appropriate in some circumstances to reduce a fiscal deficit, and even run a surplus, this would pose a problem for the Philippine private sector unless we simultaneously managed to run a current account surplus. It is also incorrect to think, as a general rule, that a country that runs a fiscal surplus is better managed than a country that runs a fiscal deficit.

The arguments above have important implications for development. We do not claim that the government should spend as if there’s no tomorrow. Rather, our claim is that it should use the power it has to issue and spend its own currency, in order to pursue public purpose and well-being. Such a government should spend whatever is necessary to bring the economy as close as possible to full employment, to provide all basic needs including high-quality education and health, to construct infrastructure, and to guide the economy toward sectors that require workers with high skills and pay high wages — this is good economics and development. Government spending is a tool to attain these objectives, not a capital sin.

When the economy expands, to a significant extent thanks to government spending, the deficit and national debt will represent a smaller share of the GDP. The limit to government spending is inflation, resulting from the fact that the economy is operating at full employment. Constraining spending beforehand is a serious policy mistake.

Plea to the government and the Central Bank: unless we become an exporting nation and run a current account surplus, you will have to run a fiscal deficit if you want to pursue the nation’s well-being. It will be your best ally to manage the economy. Do not force a reduction in the deficit, much less a surplus. Issuing Treasury Notes is a must as it helps ensure that the Central Bank hits its target interest rate.

Plea to the Filipino capitalists: the next time you hear the government bragging about the reduction in the fiscal deficit and the national debt, do not be fooled: the government is ripping you off of your profits. Embrace Karl Marx, unite and strike.

 

Jesus Felipe is a distinguished professor of Economics and a research fellow at De La Salle University. Beatrice Elaine Banzon is an Economics student at De La Salle University.